Canada Secondary Suite Loan Program‍

A federal program offering low-interest loans up to $80,000 (15-year term at ~2% interest) to help finance a new secondary unit Launched in early 2025, this pilot loan makes it cheaper to add a basement apartment or laneway home by providing financing well below typical market rates.

B.C. Secondary Suite Incentive (SSIP)

A provincial pilot program covering 50% of construction costs (up to $40,000) as a forgivable loan to build a rental suite. If you rent the new unit at below-market rates for five years, you never have to repay this loan. (This three-year program launched in 2024 to create affordable rental units across B.C.).

Multigenerational Home Renovation Tax Credit

A one-time federal tax credit (15% of expenses up to $50k) worth up to $7,500 for constructing a secondary suite to house a senior parent or an adult with disabilities. This refundable credit encourages multigenerational living by helping cover the cost of a granny flat or in-law suite.

Canada Greener Homes Grant‍

Grants up to $5,000 for energy-efficient upgrades (insulation, windows, heat pumps, solar panels, etc.) which can be applied to your ADU project. If your laneway house or suite is built to high-efficiency standards, you can qualify for rebates that lower your overall construction cost.

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GST New Housing Rebate‍

A rebate of the federal GST on a newly built or substantially renovated home, including major additions like a laneway suite.

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Home Equity Loan (Second Mortgage)

A lump-sum loan secured against your home’s equity, subordinate to your first mortgage. This allows you to keep your existing primary mortgage (useful if you have a low rate locked in) while tapping equity. Pros: Provides a large one-time cash infusion with a fixed interest rate and predictable payments. Cons: Typically carries a higher rate than a first mortgage and adds a second monthly payment.

Home Equity Line of Credit (HELOC)

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A flexible, revolving credit line backed by your home equity (usually up to ~65% of your property’s value). Pros: Borrow as needed in stages and pay interest only on the amount used – ideal for an ADU build with unpredictable costs. Cons: Variable interest rates; requires at least 20% existing equity and strong credit. (It’s a great choice if you have substantial equity and want to avoid refinancing your low-rate first mortgage.)

Construction Loan (Progress-Draw Mortgage)

A short-term loan that releases funds in phases as your ADU is built. Often interest-only during construction, then converts to a standard mortgage once the unit is complete. Pros: Covers large construction costs with lender oversight – the bank pays contractors at set milestones, ensuring you have funds for each stage. Cons: Requires detailed plans, lender approval, and usually a building permit in hand before the first draw; more paperwork and oversight are involved.

Cash-Out Mortgage Refinance ‍

Refinance your existing mortgage to withdraw equity (you can typically refinance up to 80% of your home’s appraised value). This gives you a lump sum at today’s mortgage rates to fund the ADU. Pros: Often the lowest interest cost option since it’s a first mortgage rate; can simplify payments into one loan. Cons: Resets your mortgage term and could incur prepayment penalties if you break your current mortgage mid-term. You’ll also start a new, larger mortgage – something to weigh if your original rate was very low.

Unsecured Renovation Loan or Line of Credit ‍

A personal loan or line of credit not tied to your home. Pros: Fast approval based on income/credit, and no risk to your property (no lien). Cons: Much higher interest rates and smaller limits than home-secured loans. These are best for smaller renovation projects or as a last resort to cover budget overruns, given the cost of interest.

HELOC vs. Refinance (Vancouver) – In Vancouver’s high-value market, a HELOC lets you keep a low-rate first mortgage and draw equity in stages; a cash-out refinance rolls everything into one new loan—useful if your fixed term is ending.

Government-Backed Funds First (B.C.) – Start with the $40,000 B.C. Secondary-Suite Incentive and the $80,000 federal suite loan, then layer GST rebates and Greener Homes grants before turning to bank debt.

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Equity Gap-Fillers – When costs exceed grants or low-interest loans, a second mortgage or unsecured line of credit can cover design fees, permit charges, or contingency overruns without disturbing your primary mortgage.

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Progress-Draw Construction Loans – For detached laneway houses, lenders release funds at foundation, framing, and lock-up milestones—keeping builders paid while you pay interest only on money already drawn.

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What zoning and permit rules do I need before any financing kicks in?

‍Vancouver requires a Building Permit for every secondary or laneway suite; detached laneway houses must also meet design guide setbacks and, in some cases, a Development Permit. Lenders and the B.C. $40,000  incentive won’t advance funds until permits are approved. Our step-by-step Process Map can help you navigate through the steps.

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How much rental income can I expect from an ADU in Vancouver?

‍Rents vary by location, square footage, and fit-out quality. Check the latest CMHC Rental Market Report for city-wide averages, then plug numbers into the Resimates Rental-Income Calculator to model cash flow before you build.

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Where can I decode the jargon—Home Improvement Loan, LTV, Line of Credit (LOC)?

‍Head to our Key Financial Terms. It covers everything from B.C’s gentle-density zoning classes to financing acronyms, so you can read permits or loan docs with confidence.