How to Finance a Garden Suite
in Ontario — Honestly
The financing landscape for Ontario garden suites changed significantly in 2025. The Canada Secondary Suite Loan Program was cancelled before it launched. What did go ahead — and what actually works right now — is the CMHC insured mortgage refinancing, your HELOC, and the Simcoe County forgivable loan programs. Here is the complete and accurate picture.
Many websites still reference the federal loan program as available. It is not. The CMHC Refinancing option that did proceed is the key federal tool — and it is more powerful for most homeowners. Talk to a mortgage professional for your specific situation.
Most Ontario garden suites are paid for with a mix of savings, a HELOC and CMHC’s insured refinance, which can lend up to 90% of the finished value to add a unit. The federal $80,000 suite loan was cancelled before it launched. In Simcoe County, a forgivable loan of up to $50,000 can also apply if you rent at an affordable rent.
Important correction — widely circulated information is wrong: The Canada Secondary Suite Loan Program ($80,000 at 2% over 15 years) was widely announced in December 2024 and promised for early 2025. It was subsequently cancelled in Budget 2025 before it ever opened to applications. The government cited overlap with the CMHC insured mortgage refinancing changes that did take effect on January 15, 2025. If you have seen this program referenced as available on a contractor’s website or in other garden suite guides, that information has not been updated. The program does not exist. The CMHC refinancing option is the federal tool that actually went ahead and it is explained in detail below.
Funding Programs That Are
Actually Available in Simcoe County
While the federal loan program was cancelled, three local and regional programs remain active for Simcoe County homeowners. These can be stacked with your HELOC or CMHC refinancing to meaningfully reduce the amount you need to borrow.
Simcoe County Secondary Suites Program
Up to $50,000A 15-year forgivable loan for Simcoe County homeowners who commit to renting their garden suite at attainable rates. Year-round intake, subject to limited funding — first-come, first-served, with priority for projects ready to begin construction. Must be a permitted, code-compliant dwelling unit. Not available for short-term rentals.
Barrie Bonus Top-Up
Up to $15,000An additional local incentive through Barrie’s Housing Community Improvement Plan, stackable on top of the County program. Launched June 2025. Unique to the City of Barrie — not available in other Simcoe County municipalities. For eligible registered DADUs only. Combined with the County program, Barrie homeowners can access up to $65,000 in forgivable loan funding from these two sources. Funding is limited. See full Barrie guide →
Town of Collingwood Grant
Up to $10,000A local incentive for eligible Collingwood properties creating garden or secondary suites. Stackable with the County forgivable loan. Eligibility conditions apply — confirm current availability and program terms directly with the Town of Collingwood before budgeting. Terms and availability can change between program years.
What “forgivable loan” means: A forgivable loan does not need to be repaid if you comply with the program conditions throughout the term — typically keeping the unit as an affordable long-term rental for 15 years. If you sell the property or stop renting at attainable rates before the term ends, the unforgiven portion of the loan becomes repayable. This is why these programs are targeted at homeowners committed to long-term rental, not short-term rental or family accommodation. Confirm current eligibility and funding availability for all programs before building them into your budget — they are subject to annual funding limits and terms can change. Our $399 + HST feasibility report checks your eligibility →
CMHC Insured Refinancing —
What It Does and Who It Helps
The CMHC insured mortgage refinancing changes that took effect January 15, 2025 are the real federal contribution to garden suite financing — and for many Ontario homeowners they unlock more borrowing capacity than the cancelled loan program would have.
How the CMHC Refinancing Works
Your lender and CMHC use the post-renovation appraised value of your property — meaning they count the value added by the completed garden suite before it exists
You can refinance up to 90% of that post-renovation value, versus the standard 80% cap on a conventional refinance — significantly more borrowing capacity
Properties up to $2 million in value are eligible — covering most Simcoe County residential properties
Amortization periods up to 30 years are available under this program — compared to 25 years on standard insured mortgages
The homeowner or a close relative must occupy one of the units on the property — you cannot use this for a pure investment property where neither owner nor family lives
The garden suite must meet local zoning and Ontario Building Code requirements — a permitted, legal unit is required
Who This Helps Most
Homeowners with less than 35% equity in their property — for whom a conventional 80% LTV refinance doesn’t provide enough to cover a $250K–$350K garden suite cost
Homeowners whose existing mortgage is at or near renewal — making refinancing at the new rate straightforward and avoiding prepayment penalties
Those who want the lower monthly payment that comes with a 30-year amortization — improving cash flow while the garden suite rental income is ramping up
Homeowners planning to rent the garden suite long-term — rather than use it for short-term rentals, which may not qualify
Important: This is insured mortgage financing — CMHC insurance premiums apply (typically 0.6%–4.5% of the insured mortgage amount depending on the LTV). Factor this into your cost calculation with your mortgage professional.
Work with a licensed mortgage broker who understands the secondary suite refinancing rules — not all lenders have implemented this product equally. A broker can identify which lenders are actively offering it.
What the Numbers Look Like
on a Typical Simcoe County Property
This is a simplified illustration using representative Simcoe County figures. Actual results depend on your property value, existing mortgage balance, credit profile, lender, and current rates. Always work through this with a licensed mortgage professional.
Scenario: Barrie Homeowner — 1-Bedroom Garden Suite for Rental Income
Property value: $720,000 · Existing mortgage: $390,000 · Garden suite cost (all-in): $285,000
Option A — HELOC + Simcoe County Grant Stack
Option B — CMHC Insured Refinancing
How to Choose the Right
Financing Approach for Your Project
The right financing structure depends on your equity, income, mortgage timing, and how you plan to use the garden suite. Here is how to think through the decision.
Start Here — Questions That Determine Your Path
How much equity do you have? Calculate 65% of your home’s current appraised value minus your mortgage balance. If the result covers your project cost, a HELOC may be sufficient. If not, you need the CMHC refinancing or a construction loan.
When does your mortgage renew? If within 12 months, plan your refinancing to coincide with renewal to avoid prepayment penalties. If 2+ years away, a HELOC is usually the more cost-effective near-term option.
Will the garden suite be a long-term rental? If yes, the Simcoe County forgivable loan and Barrie Bonus are worth pursuing. If you plan short-term rental or family use, these programs likely don’t apply — and the CMHC refinancing may have restrictions too.
Do you or a family member occupy the property? The CMHC insured refinancing requires owner or close relative occupancy. Pure investment properties don’t qualify.
What is your Barrie-specific eligibility? If you are in Barrie, the combined forgivable loan + Barrie Bonus ($65,000) changes the financing picture. Always model the grant stack before deciding how much to borrow. Barrie full guide →
Common Financing Combinations That Work
Most garden suite projects in Simcoe County use a combination of sources rather than a single product. Here are the combinations we see most frequently:
HELOC + Simcoe County grant + personal savings: Works well for homeowners with significant equity who don’t want to refinance their full mortgage. The grant covers a meaningful portion; HELOC covers construction costs; savings cover the gap. No CMHC insurance premium required.
CMHC refinancing (90% post-reno) + Barrie Bonus: Best for Barrie homeowners with less equity who are planning a long-term rental. The CMHC product covers the full build cost; the Barrie forgivable loan stack reduces the net amount borrowed.
Construction loan + HELOC combination: For larger projects where HELOC alone is insufficient and the homeowner doesn’t want to refinance. Construction loan covers staged draws; HELOC handles soft costs and contingency.
Personal savings + small HELOC draw: The simplest structure for homeowners with significant savings and modest financing needs. No insurance premium, no program eligibility concerns, full flexibility on how the unit is used.
Work with a licensed mortgage broker, not just your existing bank. Brokers have access to multiple lenders and can identify which institutions are actively offering the CMHC secondary suite refinancing product on competitive terms. Your bank may not be the best option for this specific product.
Six Things to Do Before
Any Financing Conversation
Lenders make better decisions — and you negotiate from a stronger position — when you come to the conversation prepared. Here is what to have ready before you approach any bank, credit union, or broker.
1. Know Your Project Cost — Realistically
The single most important thing a lender needs is a credible project budget. Vague estimates or online calculator outputs are not enough. Use our cost guide to understand what a Simcoe County garden suite actually costs, then get our $399 + HST feasibility report so you have a defensible number before approaching a lender.
2. Confirm Your Lot Is Actually Viable
Lenders will ask whether your lot is zoned, whether a permit can be obtained, and whether the project is realistic. Having a builder confirm lot feasibility before your financing conversation demonstrates you have done the work and reduces lender hesitation. Check your lot feasibility →
3. Get Your Property Appraised (Post-Reno Value)
For the CMHC refinancing option, the lender needs a post-renovation appraisal — an estimate of what your property will be worth once the garden suite is complete. Some lenders order this; others require you to commission it independently. Factor the appraisal cost into your soft costs budget.
4. Model the Rental Income Scenario
Lenders who are financing a project partly based on rental income will want to see rental income projections. Use our cost and ROI calculator to build a simple model showing the expected rent for your unit type and location — and use realistic Simcoe County rental market figures, not GTA numbers.
5. Check Your DC Exposure First
If you have not yet confirmed your development charge position with your municipality, do it before your financing conversation. An unexpected $15,000–$17,000 County levy appearing at permit stage can completely disrupt a financing structure you have already agreed on. DC guide for Simcoe County →
6. Consider Your Grant Eligibility Separately
Apply for any applicable Simcoe County forgivable loans and the Barrie Bonus before finalizing your financing structure — because if you are approved, the amount you need to borrow from a lender decreases. Grant applications and lender applications should be pursued in parallel, not sequentially. Grants take time to process; don’t wait for approval before talking to lenders.
Want to Know What Financing Makes Sense for Your Specific Property?
Our $399 + HST feasibility report gives you a realistic project cost, the development charge position, and the grant programs you may qualify for — in writing within 48 hours, before you talk to any lender. So you walk into that conversation knowing the actual number. We build across Barrie, Collingwood, Wasaga Beach, Tiny Township, Oro-Medonte, and the broader Simcoe County area. The fee is credited toward your build if you proceed with us.
Know Before You Spend a Dollar —
The $399 + HST Feasibility Report
A written, property-specific answer researched by a licensed Ontario builder — not a sales call. Delivered within 48 hours. Here is exactly what you get:
- Zoning & setback check for your specific lot — with the bylaw sections cited
- Servicing & septic capacity assessment (the #1 rural deal-breaker)
- Site, equipment access & conservation-overlay review
- Realistic all-in budget and the funding your project qualifies for
- A clear GO / NO-GO verdict, in writing
- Your next three steps, in order