H​​​ow CMHC’s Refinance Program Can Help You Pay for a Legal Suite

Turning part of your home into a rental suite can be a smart way to bring in extra income and boost your property value.

The problem? Renovations and construction aren’t cheap.

That’s where CMHC’s Refinance Program comes in. It allows you to tap into your home’s equity and borrow against it to build or upgrade a legal secondary suite — like a basement apartment or even a garage suite.

H​​​​​ow It Works (In Simple Terms)

Here’s the idea: if you already own your home, you can refinance up to 90% of its value to cover the cost of adding or legalizing a suite. CMHC provides mortgage loan insurance that makes lenders more comfortable, which often means you can get a lower interest rate.

• You must live in the home or one of the units.
• The suite must be self-contained (kitchen, bathroom, exit).
• It must be a long-term rental (no short-term rentals like Airbnb).
• The borrowed funds must go directly toward suite construction or legalization.

Garage suites do qualify under CMHC rules, as long as they are fully self-contained and meet code requirements.

R​eal-Life Examples

Example 1: Basement Suite ($70,000)

Let’s say you want to upgrade your basement into a legal rental unit, and the full cost is $70,000.

• With CMHC’s Refinance Program, you could borrow against your home’s value to cover this cost.
• If your home is worth $600,000, you can access up to $540,000 (90%).
• The $70,000 would be rolled into your mortgage and repaid over time (up to 30 years).

A legal basement suite in Calgary often rents for $1,200–$1,500/month. That income could more than cover the new financing payment.

Example 2: Garage Suite ($275,000)

Now imagine you want to build a garage suite (a living unit above a detached garage), which can cost around $275,000.

• If your home is valued at $800,000, refinancing lets you borrow up to $720,000.
• That’s enough room to fund the garage suite project and roll it into your mortgage.
• Once complete, a garage suite might rent for $1,600–$2,000/month in Calgary.

Again, that extra rental income helps offset the mortgage while boosting resale value.

T​​​​​he Next Steps to Get Rolling

• Talk to Your Mortgage Broker or Ban

Ask about using CMHC’s Refinance Program specifically for a legal secondary suite. They’ll check if you qualify based on:

1. Credit score(minimim 600)
2. Debt service ratios (GDS up to 39%, TDS up to 44%)
3. Your home’s current and “as-improved” value

• Prepare the Paperwork:

CMHC will require proof that the funds are being used for a legal suite. This typically includes:

1. Development Permit (DP)
2. Building Permit (BP)
3. Construction cost estimates or contractor quotes
4. Final occupancy permit once the project is built and passes inspection

If the suite isn’t built yet, you obviously can’t have the occupancy permit right away. Instead, lenders will accept permits, quotes, and construction plans upfront. The occupancy permit comes after construction is complete, confirming the suite is safe and legal.

• Work With a Builder Who Knows the Process

This is where Alta Home comes in. We’ll:

1. Handle DP and BP applications on your behalf
2. Provide accurate cost estimates for your financing application
3. Manage the construction and coordinate inspections
4. Deliver the final occupancy permit so your bank has all required documents

T​he Bottom Line

Whether it’s a $70,000 basement suite or a $275,000 garage suite, CMHC’s Refinance Program makes it possible to finance these projects through your mortgage instead of dipping into savings.

And with Calgary’s amnesty extension until 2026, there’s no better time to get started.

At Alta Home, we’ve already transformed over 400 basements and garage suites into legal, income-generating properties. From permits to occupancy, we handle the full process so you can focus on the results.

Ready to see what it costs? Find out instantly with our Legal Suite Cost Calculator and then let’s help you take the next step with your bank or broker.