Starting January 15, 2025, insured refinancing returns for the first time since 2016, allowing homeowners to borrow up to 90% of their property's after-improvement value to create additional housing units. Eligible projects include basement apartments, laneway houses, above-garage suites, and other self-contained living units, with properties valued up to $2 million qualifying for the program.
You must already own the property, and either you or a family member must live in one or more of the units. The new unit must be properly zoned and fully self-contained, short-term rentals are prohibited, and the total number of units on the property cannot exceed four.
The Bank of Canada implemented a significant rate cut in October, representing the most substantial single decrease since 2020. Market analysts anticipate this could mark the beginning of a broader rate reduction cycle through 2025, which combined with consumer confidence at 30-month highs, is expected to bring sidelined buyers back into the market.
Even with adjusted immigration targets for 2025 and 2026, immigration remains at historically significant levels, and current housing demand is not just from newcomers. There is a substantial backlog of established residents and immigrants who have accumulated down payments while renting, and national population growth has hit 3% with regional variations like Alberta at 4.4% and Ontario at 3.2%.
The country is seeing the lowest number of new single-family home permits in decades, with sustained below-average housing starts. This lack of supply, coupled with record population growth, has generated considerable demand pressure that new mortgage policies aim to help address.
