With BC’s $40,000 grant closed, most owners now fund a build with savings, a HELOC, a draw mortgage, or a refinance. Here is how the main routes compare.
Written by Serge, Founder, Kelowna Carriage Homes
BC’s $40,000 Secondary Suite Incentive Program closed to new applications on March 30, 2025 (BC Housing secondary suite program, program update). A proposed federal $80,000 secondary-suite loan was not implemented under Budget 2025. Financing a build today mainly means private financing tools, not a government grant.
Paying from savings or investment proceeds is the fastest route and carries no interest cost, but it ties up capital that could otherwise be invested elsewhere. This route suits owners who have the funds available and prefer not to carry debt into retirement or through a rate cycle.
A HELOC draws against equity already in the home, typically at a rate around prime plus 0.5%, roughly 4.95% against a Canada prime rate of 4.45% as of September 2026. Its flexible draw schedule suits a phased construction payment plan, but the rate is variable, which carries risk if rates move upward during the build.
A construction or draw mortgage releases funds in stages tied to build milestones, verified by inspections or appraisals at each stage. It suits an owner without an existing HELOC or with insufficient equity for one, though it involves more paperwork and lender coordination throughout the build than a HELOC does.
Since January 15, 2025, CMHC allows insured mortgage refinancing up to 90% of a home’s value, capped at $2 million, for up to four units and a 30-year amortization, specifically to add a secondary suite (CMHC refinance program details). The suite must not be used as a short-term rental; it needs a minimum 90-day tenancy term to qualify. This is currently the most suite-specific financing tool available now that the provincial grant has closed.
Some owners draw on a HELOC to cover design costs and a deposit, then roll into the CMHC-insured refinance once construction is complete and the suite is legally finished, paying down the HELOC balance at that point. It is worth confirming both products with a mortgage broker before committing to either alone.
Separately, the CleanBC heat-pump rebate offers up to roughly $5,500, stackable with a BC Hydro rebate up to $2,000, for choosing a heat pump as the mechanical system (BetterHomesBC rebate program). It is modest next to the overall build cost, but it is real money and worth claiming if a heat pump was the plan anyway.
See taxes & insurance for what changes once the unit is built and rented.
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Costs, timelines, rents, and incentive amounts on this page are estimates from the sources cited, current as of September 2026. Each is confirmed in writing in your free feasibility study. Licensed and insured; documentation available on request.