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
- Feasibility: confirm your lot allows a suite (we do this free).
- Design & quote: fixed design, fixed milestone payment schedule.
- Lender application: your lender and insurer assess the as-improved value. We supply certified drawings and documentation.
- Permits: municipal building permit with the A277 documentation package.
- 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. Use our payment calculator to model scenarios, and 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.