How to Finance a Garden Suite in Canada

Your house can pay for the house behind it

The biggest obstacle to building a garden suite was never zoning — it was cash. Suites cost real money, and until recently there was no clean way to borrow against your home for one without hitting the standard 80% refinance ceiling.

That changed in January 2025. Mortgage insurance rule changes now let homeowners refinance up to 90% of their property's as-improved value — specifically to build a legal secondary suite.

The rules that matter

• 90% LTV: you can refinance up to 90% of the property value including the value the new suite adds.
• $2 million cap: the as-improved property value must stay under $2M.
• 30-year amortization: the refinanced mortgage can run up to 30 years.
• Up to 4 units: the property can hold up to four units including your existing home.
• You live there: you (or a close relative) must occupy one of the units.
• Funds build the suite: this isn't an equity take-out — the money goes to construction.
• No short-term rentals: the suite must be rented long-term (90+ consecutive days) if rented.

The program runs through your lender and mortgage insurer. Rules are set federally and can evolve — always confirm current terms with your lender.

The catch nobody mentions: your build must qualify

Here's the part most tiny home companies won't tell you: this program funds real property, not vehicles. A tiny home on wheels is chattel — personal property, like an RV. It doesn't qualify.

What qualifies is a permanent dwelling: a garden suite on a foundation, built to your provincial building code. That's exactly what a CSA A277 modular home is — factory-built to the BC Building Code (or your province's code) with third-party in-factory inspection, then set on a permanent foundation as real property.

This is why KYRAX builds its laneway and garden suite models as certified modulars rather than THOWs. Same small-home living, completely different financing universe.

What the process looks like

1. Feasibility: confirm your lot allows a suite (we do this free).
2. Design & quote: fixed design, fixed milestone payment schedule.
3. Lender application: your lender and insurer assess the as-improved value. We supply certified drawings and documentation.
4. Permits: municipal building permit with the A277 documentation package.
5. Build & set: factory build runs parallel to your site work; the home is craned in and connected.

Run your own numbers

A garden suite that rents long-term changes household math: the suite generates income while the refinance spreads its cost over decades. Read how each build type finances before talking to your lender.

KYRAX is a builder, not a lender or financial advisor — confirm program details and your eligibility with your lender.

Ready to see if your lot qualifies? Get a free feasibility review.