Key takeaways
- Buyers may be able to include eligible suite-construction costs through a purchase-plus-improvements mortgage, subject to lender and insurer approval.
- Projected rental income from a future suite may help qualification, but it is not guaranteed to count in full — or at all.
- CMHC’s refinance route for adding a secondary suite applies to existing homeowners, not new purchase mortgages.
- Confirm the suite plan, rental-income treatment and renovation funding process before making an offer.
What changed: CMHC’s refinance information is clearer
The timely update is CMHC’s current Refinance program information, updated October 3, 2026. It confirms an insured refinance option for existing homeowners who want to build a secondary suite — but that is different from buying a home and rolling future suite costs into a new purchase mortgage.
Under the CMHC Refinance route, eligible projects can include a self-contained suite in a property with up to four units. The program allows financing up to 90% loan-to-value, with a maximum lending value below $2 million and a maximum amortization of 30 years. The borrower or a close relative must occupy one unit, the suite must meet local requirements, and it cannot be rented for stays shorter than 90 consecutive days.
Buying a home and adding a suite: possible, but not automatic
If you are purchasing a home that does not already have a basement suite, you may be able to include eligible improvement costs through a purchase-plus-improvements mortgage. CMHC lists CMHC Improvement as an option for home improvements, but the exact amount, eligible work, appraisal requirements, advance schedule and rental-income treatment all depend on lender and insurer approval.
That distinction matters. A buyer should not assume the full cost of a future suite can simply be added to the mortgage after the offer is accepted. The lender will want to understand the work, the expected value, the legality of the suite and how the funds will be advanced.
Can projected rent help you qualify?
Potentially, yes. Projected rent from a future legal suite may support an application, but it is not guaranteed to count in full. CMHC publishes different rental-income approaches, and lenders apply their own qualifying rules to the property and proposed suite.
- Ask before making an offer whether the suite plan may qualify under purchase-plus-improvements financing.
- Confirm whether projected rent can be used in the application, and how much the lender may recognize.
- Check whether permits, plans, appraisal support or local zoning confirmation are needed.
- Understand whether renovation funds will be held back until work is completed and verified.
Plan your cash flow during construction
One practical detail often gets missed: renovation funds may be held back until work is complete and verified. That means you may need a plan for paying contractors during construction instead of assuming all funds will be available upfront from the mortgage.
A legal secondary suite can be a strong long-term strategy: it may create rental income, help with carrying costs and potentially improve the home’s value. But none of those outcomes is guaranteed. There is no guarantee you will find a tenant, that rent will cover the added borrowing costs, or that the improvement will increase resale value by more than it costs.
If you are considering a home with suite potential, a Finevo advisor can help you compare options across 40+ Canadian lenders, ask the right approval questions before you write an offer, and map out whether purchase-plus-improvements or a separate refinance path makes more sense for your situation.
This article is general information about Canadian mortgages and is not financial advice. Rates, programs, and eligibility are subject to change and to lender and insurer qualification. Figures cited reflect market conditions at the time of writing. Speak with a licensed Finevo advisor for guidance specific to your situation.
