Refinancing Above 80% LTV: What Canada Actually Allows

A renewal continues a mortgage that already exists. Same principal, same property, new term and rate. No new money changes hands, so there is no new credit decision to make. Since November 2024, a straight switch to a different lender at renewal does not even require requalifying at the stress test rate — the change is covered in our guide to the OSFI stress test.

A refinance is new lending. You are asking for money you do not currently have, which triggers a full application, an appraisal, and qualification at the stress test rate. The two decisions are genuinely independent, which is why a bank can renew you happily on Monday and decline to increase your mortgage on Tuesday without contradicting itself. If you want the full comparison of the two transactions, we cover it in refinance versus renewal.

Yes, and this is the only genuine insured refinance above the line. CMHC Refinance allows borrowing up to 90% of the as-improved value — the appraised value of the home once the suite is finished, not what it is worth today. The as-improved value must come in below $2,000,000, amortization can run to 30 years, and you must already own the home with at least one unit occupied by you or a family member.

The restriction that catches people is written into the program itself: the additional financing must be used to complete the project, and equity take-out is not permitted. You cannot use a planned suite as the justification for releasing cash you intend to spend elsewhere. The money is tied to the build.

One genuine exception is worth knowing, because it is the closest thing to consolidation that exists above the line. Both Sagen and Canada Guaranty allow debt that is already secured against the property — a second mortgage or a HELOC registered on title — to be rolled into the suite refinance, along with roughly $3,000 in soft costs. Unsecured debt cannot come along. A homeowner with a HELOC balance sitting behind their first mortgage may clean it up in the same transaction; a homeowner with $40,000 on credit cards cannot.

This is a separate thing from the $80,000 federal loan that contractors were promoting through 2025. That program — the Canada Secondary Suite Loan Program — was cancelled in Budget 2025 and never accepted a single application. We wrote up the whole story in the $80,000 suite loan is cancelled, including the financing that does exist.

You can get to 95%, but the honest answer is that you do not get there by refinancing. Sagen’s published Equity Buy-Out policy is “available on purchase transactions up to 95% LTV” and requires that “both parties must be currently on title to the property.” Canada Guaranty publishes an equivalent policy under its own name.

Read that first quote again, because it is the entire mechanism. It is a purchase. The person keeping the home is buying the departing co-owner’s interest in it, and a purchase is not governed by the 80% refinance ceiling — it is governed by the ordinary insured-purchase rules, which go to 95%. Nobody has carved a hole in the refinance ceiling. They have routed around it by using a different transaction.

Two consequences follow, and both get missed. First, because it is a purchase, the ordinary purchase insurance premium applies to the entire new mortgage, not just the new money — at 95% that is 4.00%, which on a $760,000 mortgage is $30,400 added to your balance. Second, the published policies are written around co-owners on title, not around marriage. They are not divorce-only products, whatever the common name suggests. Our guide to buying out a co-owner walks through the process, and removing a co-signer covers the adjacent case where nobody is being bought out at all.

The two most common reasons Canadians want to refinance are the two with no rung: taking out cash for general purposes, and consolidating consumer debt. Every insured program above the line is attached to a named purpose, and neither of those is on the list. Having more equity does not help, because the ceiling is measured against the property value, not against your comfort.

There is one narrow qualification, and it is worth stating precisely rather than as a blanket no. Debt that is already secured against the home can be folded into the secondary-suite refinance described above, because it is being replaced rather than created. That is not a consolidation program — it only exists if you are genuinely building a legal suite. Unsecured debt has no route above 80% under any insured program.

A HELOC is not the workaround either. OSFI’s B-20 caps the revolving portion of a combined mortgage-HELOC at 65% of property value, well below the 80% refinance ceiling, so a borrower stuck above 80% is further from a HELOC than from a refinance. We compare that structure against the alternative in reverse mortgage versus HELOC.

If you are above 80% and you need money, what remains sits outside the A-lender world: a second mortgage or a private lender, at materially higher rates and with fees that deserve careful arithmetic before you sign; selling; or waiting while the balance amortizes down and the value recovers. Those are real options, not consolation prizes, but they should be priced honestly rather than sold as equivalents.

If you are already under water rather than merely over the line, that is a different and harder problem, and we handle it separately in renewing with negative equity.