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Refinancing Your Home to Add Additional Units
January 27, 2025 | Posted by: Jamie Small - Ottawa Mortgage Broker
Have you ever thought about turning your home into more than just a home? With an exciting new program recently launched by CMHC, you can do just that. This program is designed for homeowners to add additional self-contained units to their property by refinancing up to 90% of their home's “as improved” value. Intrigued? Let's review the details.
What’s the Deal with the New Program?
This new program allows homeowners to refinance and add self-contained units to their property. Here's the fine print to consider:
- The property must be owner-occupied or occupied rent-free by an immediate family member.
- Investment or rental-only properties do not qualify for the program.
This CMHC program offers a real opportunity to enhance your property’s value while creating a revenue-generating unit. Adding a rental unit could generate thousands of dollars per month in rental income, helping to reduce monthly costs drastically. What could you do with another $2,000 or more per month?
Why This Program is a Game-Changer
Traditionally, adding units to your property required at least 20% equity in your property and substantial funds in hand to complete the construction before being eligible to refinance. That’s a hefty hurdle for many homeowners.
But with this new CMHC program, taking your property to the next level is more accessible than ever. For those with limited equity or fewer resources upfront, this could be the perfect pathway to tackle your project. It’s an opportunity to invest in your home, reduce your monthly costs, and increase its long-term value—all rolled into one.
The Practical Benefits of Adding a Unit
Aside from the obvious financial upsides, adding a self-contained unit can massively improve your property’s utility:
Supplemental Income: Use the additional rental income to cover mortgage repayments, monthly bills, or other expenses. It’s money that works as hard as you do.Boosted Property Value: The market loves homes with self-contained units. It’s an attractive feature for potential buyers down the line, whether it's for multi-generational living or rental income.
A More Efficient Household: Owning a home that generates revenue transforms your relationship with monthly expenses—think of it as working smarter, not harder.
What You’ll Need to Get Started
Adding a new unit to your home might sound daunting, but it's achievable with the right plan and resources. Here’s what you’ll want to have in order before you get started:
- A detailed list of all the intended improvements and cost estimates for the construction.
- Building plans.
- Building permit
- Occupancy permit (once construction is complete.)
A Little Help Goes a Long Way
We get it—these projects seem complex at first glance, and there’s a lot to consider. That’s where an experienced guide makes all the difference. Our team has lots of experience with these, including hands-on experience building additional units for ourselves. We've been through it and can guide you to a successful investment property!
Ready to Elevate Your Home? Contact Us Today.