Key takeaways
- Refinance Plus Improvements lets eligible homeowners refinance using the future “as-improved” value of their home, not just today’s value.
- For many uninsured, owner-occupied refinances, borrowing is still capped at 80% of the improved property value.
- Renovation funds are commonly held back and released only after the work is completed and confirmed by an appraiser.
- Some newer lender options are more flexible for legal rental suites, but borrowers still need to qualify and understand the higher mortgage balance.
What changed: a familiar option is getting more attention
Refinance Plus Improvements is a long-standing Canadian mortgage feature, not a new federal program. What has changed is that several lenders have updated or clarified their guidelines and marketing in 2024–2025, making this option more visible for homeowners who want to renovate without relying entirely on unsecured credit or separate renovation loans.
The basic idea is simple: instead of lending only against your home’s current value, the lender may consider the future value of the property after approved improvements are completed. That future value is supported by contractor quotes and an appraisal showing both the “as is” and “as improved” values.
How Refinance Plus Improvements works
For mainstream uninsured refinances on owner-occupied properties, lenders generally still cap borrowing at 80% of the improved property value. This can create more room to finance renovations when the work clearly adds market value, but it does not mean every project or every borrower will qualify. The homeowner must still meet the lender’s income, debt, credit and stress-test requirements.
- You get detailed quotes for the proposed renovation work.
- An appraisal estimates the property’s current value and future value after the improvements.
- The lender approves the refinance based on its loan-to-value rules and renovation limits.
- The renovation portion is often held back in trust by the solicitor.
- Funds are released after the work is completed as quoted and confirmed, typically within the lender’s required timeline.
Recent lender materials also clarify that the renovation component itself is often capped. Many programs limit improvement costs to the lesser of a percentage of the current or improved property value, or a dollar cap often in the $40,000 to $50,000 range. Some products use a limit such as the lesser of 20% of the improved value or $40,000, depending on the lender and product.
Why legal suites are a growing focus
One notable development is that some niche or insured options are being tied specifically to legal rental suites. For example, Strive’s July 2025 Refinance Plus Improvements program allows up to 90% of the as-improved value, to a maximum of $2,000,000, for adding a legal rental suite. These programs can support homeowners who are trying to create rental income or add housing supply, but they still depend on zoning, owner-occupancy rules, lender policy and borrower qualification.
The trade-off: better financing, but a bigger mortgage
The main benefit is that renovation financing may be folded into the mortgage at mortgage-style terms instead of being handled through higher-interest unsecured credit. This can be especially relevant for homeowners renewing into higher payments who also need to improve the home, modernize aging systems or create a legal suite.
The trade-off is important: a larger mortgage balance can increase total interest paid and leave you more exposed to future rate changes. Before proceeding, it is worth modelling the new payment, confirming the renovation is likely to improve value and marketability, and understanding exactly when holdback funds will be released.
If you are considering a renovation refinance, a Finevo advisor can help you compare options across 40+ Canadian lenders, estimate what may be possible under current guidelines, and map out a plan before you commit to quotes, appraisals or a larger mortgage.
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.
