5 Ways to Finance Your Legal Basement Suite Renovation in Calgary

Home Equity Financing and Government Incentives for Your Legal Basement Renovation or Garage Suite

Understanding how to finance your legal basement suite or garage suite is crucial in deciding whether this investment is right for you. Building a legal suite not only increases your home’s appraised value but also provides rental income or an option for multi-generational living. In Calgary, a well-maintained legal basement suite can generate around $2,000 per month, with high demand for quality rental spaces. Generally, the value of your home increases more than the renovation costs, making this a sound financial decision.

However, legal basement suite renovation require a significant upfront investment. Knowing your financing options and understanding the potential return on investment will help you make informed decisions as a homeowner or home buyer.

1. The Benefits of Legal Basement Suites

Legal basement suites in Calgary serve not only homeowners but also the broader community. By increasing the availability of affordable housing options while using existing infrastructure, these suites provide homeowners with more financial flexibility. They help optimize land use, create diverse housing options, and offer financial benefits while fostering inclusive, dynamic communities.

The Financial Opportunity:

• A legal basement suite can serve as a mortgage helper or provide a steady stream of rental income.

• It enhances the resale value of your home and increases your borrowing power through home equity.

2. Calgary’s $10,000 Secondary Suite Incentive Program

Currently, the City of Calgary offers a $10,000 Secondary Suite Incentive Program to encourage the development of legal suites. This incentive helps homeowners cover some of the construction costs associated with making their suites compliant with safety and building codes. Homeowners who qualify can use the funds to cover expenses like installing egress windows, fire-rated drywall, and smoke detectors.

For more details, visit Calgary’s Secondary Suite Incentive Program.

3. Federal Government’s New Financing Plan for Secondary Suite

The Federal Government has introduced a financing option that allows homeowners to refinance their current mortgage to build a secondary suite. With this plan, homeowners can access up to 90% of their home’s value, including the value of the new suite, and amortize the refinanced mortgage over a period of 30 years.

This offers a flexible, long-term financing solution that helps offset the costs of adding a legal basement or garage suite.

4. Home Equity Line of Credit (HELOC)

One of the most popular options for financing a legal basement suite renovation is through a Home Equity Line of Credit (HELOC). This allows homeowners to borrow against the equity in their home, offering a revolving line of credit with flexible repayment terms.

How It Works:

• You can borrow up to 80% of the appraised value of your home, minus any outstanding mortgage balance.

• As you pay down the mortgage, the available credit increases.

• Interest rates for HELOCs typically range from Prime Rate + 0.50% to Prime Rate + 1%.

• Additional fees may apply, such as appraisal and registration fees.

  
  

For Homes Without a Mortgage:

• If your home is free and clear of a mortgage, you can borrow up to 65% of its appraised value.

  
  

This option provides flexibility, as you can borrow as much or as little as you need for the renovation, making it ideal for homeowners who want to manage their finances efficiently.

5. Mortgage Refinance

If you prefer not to open a line of credit, a mortgage refinance is another option. This allows you to borrow up to 80% of your home’s appraised value by adding the new loan amount to your existing mortgage. The new mortgage rate is blended with the current one, and the funds are provided as a lump sum in cash.

How It Works:

• The total value of your home is reassessed, and you can borrow up to 80% of the new appraised value.

• The additional funds are added to your mortgage, and you’ll receive the money as a cash deposit.

• This option can help spread the renovation costs over a longer period and lock in competitive mortgage rates.

  
  

Why Financing a Basement Suite Is a Smart Investment

At Sanctuary Spaces, we take pride in offering high-quality, legal basement suites starting at $69,500. This cost covers all necessary elements to ensure compliance with the City of Calgary’s regulations, including permits, inspections, and design. Additional customizations, such as multi-bedroom layouts, custom woodwork, designer fixtures, and unique features like built-in wet bars or bespoke saunas, are available as add-ons.

While garage suites are another fantastic option, they typically require a larger investment due to infrastructure needs like septic systems, gas, and electrical connections, starting at approximately three times the cost of a legal basement suite.

Making the Right Financial Choice

Before beginning any renovation project, it’s important to assess which financing option works best for you. Whether you choose a HELOC or a Mortgage Refinance, understanding your financial position and goals will ensure your project is successful.

Investing in a legal basement suite is a smart financial decision for many homeowners, and figuring out the best way to finance your project is key to making it a reality. Whether you're exploring home equity options or taking advantage of Calgary’s Secondary Suite Incentive Program, Sanctuary Spaces is here to help.

Contact us today for a free consultation, and let our experts guide you through every step of building your legal basement suite—from financing to design—so you can maximize your home’s potential and secure a valuable new income stream.