A legal basement apartment in the GTA typically costs $90,000 to $130,000 under standard conditions. Most homeowners do not have that sitting in a savings account, and the funding gap is one of the most common reasons a suite project stalls. The rental numbers work. The cash is not there. The good news is that a legal secondary suite is among the more financeable renovations a homeowner can take on, because it produces income and adds value a lender can appraise. Federal mortgage insurance rules changed in January 2025 specifically to support it. This guide compares six realistic ways to fund a $100,000 legal suite: what each involves, what each costs per month, and who it suits. Rates are current as of September 2026. 

Why Financing Often Beats Waiting

• Rental income starts sooner. A financed suite earns from the first month of occupancy. A suite you are still saving for earns nothing in the meantime.
• The value gain does not depend on how you paid. A registered legal suite typically adds in the range of $80,000 to $150,000 to a GTA property, depending on the neighbourhood and the appraiser. That value exists once the suite is complete and registered, whether it was built with cash or credit.
• Construction costs rarely fall. GTA renovation costs have trended upward for years. Saving for two or three more years can mean paying noticeably more for the same scope.
• The income offsets the payment. At $2,000 per month in rent, most of the structures below leave the suite covering its own debt with cash left over.

Be Honest About the Numbers First

 Rent is not profit. Before comparing loan products, list what the rent has to cover: 

• The financing payment itself
• Higher property insurance, typically $300 to $700 more per year for a rented secondary suite
• Utilities, if the suite is not separately metered
• Vacancy, budgeted at roughly one month per year
• Maintenance and turnover costs
• Income tax on the net rental income

 A reasonable planning assumption is that 15 to 25 percent of gross rent goes to costs other than the loan payment. At $2,000 per month, plan on $1,500 to $1,700 in reliable net income. A structure that stays comfortably below that number carries itself. One that needs the full $2,000 is tighter than it looks. 

Six Financing Options at a Glance

Option 1: Insured Refinance for Secondary Suites

 This is the strongest option for many GTA homeowners, and the one most have never heard of. Since January 15, 2025, federal rules allow an insured refinance of up to 90 percent of the property's as-improved value, with amortization of up to 30 years, when the funds are used to build a self-contained secondary suite. The lending value must be below $2 million. CMHC offers it as CMHC Refinance, and Sagen and Canada Guaranty offer equivalents. Why it matters: a conventional refinance stops at 80 percent of current value. This program lends against what the home will be worth once the suite is finished, which can decide the project for a homeowner with limited equity. Lenders use the lower of the as-improved appraisal or the current value plus construction cost. Cost: $100,000 added at roughly 4.25 to 4.75 percent over 30 years works out to about $490 to $525 per month, the lowest fully amortizing payment of any option here. Requirements and cautions: 

• The suite must be self-contained, legal and code compliant, with its own kitchen, bathroom, living space and entrance
• No short-term rentals. Tenancies must run at least 90 consecutive days
• You or a close relative must occupy one of the units
• Approval must be in place before construction begins or very early in the project. It cannot be arranged retroactively
• Funds go to project costs only, not general equity take-out
• At least one borrower needs a credit score of 600 or higher, and standard debt service limits apply (GDS 39 percent, TDS 44 percent)

Option 2: Home Equity Line of Credit (HELOC)

 A HELOC lets you borrow against existing equity at a floating rate secured by the property. 

• Rate: typically prime plus 0.5 to 1.0 percent. With prime at 4.45 percent, most HELOCs sit between 4.95 and 5.45 percent.
• Flexibility: draw as construction progresses and pay interest only on what you have drawn. Fully drawn at 5.45 percent, interest is about $455 per month.
• Limits: the revolving portion is capped at 65 percent of appraised value, and mortgage plus HELOC cannot exceed 80 percent.
• Tax: interest on money borrowed to earn rental income is generally deductible against that income. Confirm with a tax professional.

 The risk is the same feature that makes it attractive. Nothing forces you to repay principal, the rate floats, and balances tend to sit for years. If you amortize it deliberately, $100,000 at 5.45 percent over 10 years is about $1,085 per month and roughly $30,000 in total interest. 

Option 3: Conventional Mortgage Refinance

 Replace your existing mortgage with a larger one and take the difference in cash, up to 80 percent of current value. No insurance premium applies. 

• Rate: uninsured five-year fixed rates in Ontario are around 4.5 to 5.25 percent for well-qualified borrowers.
• Payment: $100,000 over 25 years at 5.0 percent is roughly $585 per month.
• Qualifying: the new mortgage must pass the stress test at your contract rate plus 2 percent or 5.25 percent, whichever is higher. Many lenders count a portion of projected rent, commonly 50 to 80 percent, toward your income.

 The trade-off is a low payment with a long tail: about $75,000 in interest over 25 years. Breaking a fixed term early also triggers a prepayment penalty that can reach five figures. Time the refinance to your renewal date if you can. 

Option 4: Financeit Renovation Financing

 Financeit is a Canadian point-of-sale lender for home improvement, available through contractor partners including Maple Leaf Quality Renos. 

• Amount: up to $100,000, unsecured. No appraisal and no lien on the property.
• Rate: generally 8 to 15 percent depending on credit profile, term and plan.
• Approval: often same day. The initial check is a soft inquiry that does not affect your credit score.
• Payments: monthly, bi-weekly or weekly, with amortizations up to 180 months on qualifying plans.

 Monthly payment on $100,000 at 10 percent: 

 Stretching the term makes the payment manageable but more than triples the interest. Over 15 years, an unsecured loan costs almost as much in interest as the suite itself. Financeit fits when you lack equity, need to move quickly, or do not want to touch your mortgage. It is rarely the cheapest route if equity is available. 

Option 5: Personal Loan From a Bank or Credit Union

 A personal loan gives you fixed payments over a defined term, usually unsecured, at about 6 to 14 percent. Most institutions cap unsecured loans at $50,000 to $75,000, so a $100,000 suite usually needs a second source. At 8 percent over five years, $100,000 costs about $2,030 per month. Approval and funding typically take three to seven business days. 

Option 6: The Combination Approach

 Many homeowners use two sources and keep some cash in reserve instead of draining savings. One example: 

• Savings applied to the project: $30,000
• Financeit loan: $70,000 at 10 percent over 7 years, about $1,160 per month
• Position at $1,600 in reliable net rent: about $440 per month positive from the first month of occupancy

 Combining sources lets you use the cheapest capital first, keep an emergency buffer intact, and avoid stretching any one product to its limit. 

What Happened to the $80,000 Federal Loan

 You may have read about the Canada Secondary Suite Loan Program. Budget 2024 announced it at $40,000, and the 2024 Fall Economic Statement raised it to $80,000 at 2 percent over 15 years, with a launch promised for early 2025. It never opened. Budget 2025 confirmed the program would not be implemented because it overlapped with the insured refinance rules described in Option 1. Many websites still describe it as something you can apply for. You cannot. 

How to Choose the Right Option

• Limited equity and you qualify for an insured mortgage: start with the insured refinance. The 90 percent as-improved valuation was designed for this project.
• Substantial equity and you want flexibility: a HELOC gives a low secured rate and lets you draw only what the build consumes.
• Equity and you want the lowest payment: a conventional refinance at renewal, with rental income counted toward qualifying.
• Little or no equity, or you need to start now: Financeit, on the shortest term your cash flow can absorb.
• Partial savings: combine sources, and put the cheapest money in first.

 The right answer depends on your equity position, your mortgage renewal date, your credit profile, and how much payment your budget can absorb before the first rent cheque arrives. 

Talk to Us Before You Decide

 Maple Leaf Quality Renos is a Financeit partner and can facilitate a financing application for any legal suite we build. We also discuss financing at every consultation, including the options we do not provide ourselves, because a properly structured suite starts with a construction quote a lender will accept. If you are considering the insured refinance, talk to us early. It requires approval before construction begins, and a detailed scope and cost estimate is part of the application. 

 Rates and program details are current as of September 2026 and are subject to change. This guide is general information, not financial or tax advice. Confirm terms with a licensed mortgage professional or your lender.