Quick Answer
Most owners finance a garden suite with a combination of home equity and government tax credits. Since January 2025, insured-mortgage rules let qualifying homeowners refinance up to 90% of their property's as-improved value specifically to add a secondary suite — the main federal support available today, after the previously announced Canada Secondary Suite Loan Program was cancelled in Budget 2025 before it launched. The balance typically comes from a HELOC or a conventional mortgage refinance against your existing home. Families building for a senior or a disability-tax-credit-eligible adult may also claim the Multigenerational Home Renovation Tax Credit, worth up to $7,500. With GTA one-bedroom suites renting for roughly $1,900 to $2,600 per month, rental income can carry much of the borrowing cost.
What happened to the Canada Secondary Suite Loan Program
If you've read about a federal loan of up to $80,000 at a low interest rate for adding a secondary suite, that was the Canada Secondary Suite Loan Program, announced in the 2024 federal budget. It was cancelled in Budget 2025 before it ever opened for a single application, so do not plan your financing around it. The real federal support available to garden suite builders today is insured mortgage refinancing: since January 15, 2025, qualifying homeowners can refinance up to 90% of their property's as-improved value — meaning the value with the finished suite included — specifically to add a secondary suite, amortized over as long as 30 years. Because the lender counts the value the suite will create, this route can fund most of a build for owners who lack a large equity cushion today. What we contribute on the builder side is the documentation the application needs: a defined scope, drawings, permits, and a written all-in contract that shows exactly what the money builds.
Home equity: insured refinancing, HELOC, and conventional refinance do the heavy lifting
For most GTA homeowners, the bulk of a garden suite budget comes from the equity in the existing home. Since January 2025, insured-mortgage refinancing lets qualifying owners borrow up to 90% of their property's as-improved value specifically to fund a secondary suite, which is often the largest and cheapest layer available. A home equity line of credit suits construction well too, because you draw funds only as project milestones come due, paying interest only on what is advanced, and lenders typically allow you to borrow up to a set share of your home's appraised value across your mortgage and HELOC combined. A conventional mortgage refinance is another alternative, rolling the project cost into a new mortgage, often timed to a renewal. Which structure is cheapest depends on your rate environment, renewal date, and how much equity you hold, which is a conversation for your mortgage broker or bank. Where we help is on the lender's checklist: institutions want to see permits, professional drawings, a fixed-scope contract with a licensed and insured builder, and clear payment milestones, all of which our design-build contract provides as a matter of course.
Tax credits and other supports worth claiming
Beyond financing, two supports directly reduce what a garden suite costs you. The Multigenerational Home Renovation Tax Credit is a refundable federal credit worth 15 per cent of up to $50,000 in eligible construction costs, a maximum of $7,500, when you build a self-contained secondary unit for a qualifying family member, a senior aged 65 or older, or an adult eligible for the disability tax credit. A garden suite built as an in-law home is a natural fit, though CRA's eligibility rules are specific, so confirm your situation with your accountant. Second, provincial housing reforms have broadly relieved qualifying additional residential units from development charges, a saving already reflected in realistic project pricing rather than a cheque you receive. Some municipalities periodically run their own ARU incentive or forgivable-loan programs, and these come and go, so it is worth checking your city's current offerings during planning. Rental income itself has tax dimensions too: it is taxable, but expenses and capital cost considerations apply, which is another reason to loop in an accountant before your first tenant moves in.
Making the numbers work as an investment
The arithmetic that convinces most owners looks like this: a finished suite renting at the GTA's typical $1,900 to $2,600 per month generates $22,800 to $31,200 per year, income that services a large share of the borrowing on a $285,000 to $450,000 build, while the underlying asset sits on land you already own and adds to your property's value. Stack the supports: an insured refinance covering up to 90% of the as-improved value at mortgage-linked rates, the MHRTC's $7,500 where family occupancy qualifies, development-charge relief already in the price, and a HELOC for the balance, and the effective carrying cost drops further. New suites are also currently exempt from Ontario's annual rent-increase guideline as new construction, which supports income keeping pace over time, though tenancy rules should be confirmed as they evolve. We are builders, not lenders, so we do not arrange financing, but we make financing straightforward: a free feasibility assessment establishes what your lot supports and a realistic all-in budget, and our fixed-price design-build contract gives your broker or bank exactly the paperwork they need to say yes.
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