Mortgage a Backyard Tiny Home

The tiny home craze is spreading like wildfire. Life in 400 square feet or less, with a mortgage to brag about it. Sounds like a plan.

Affordable Tiny Home Living

Those tiny, perfect homes on HGTV sure are cute. Sort of like a playhouse or elevated garden shed. Do people really live in those? Surprisingly enough, tiny homes can be spacious-ey. At least they free you from owning more than you need.

The Psychology of Tiny Spaces

Live Science asked environmental psychologists and architects what drives tiny home living. Affordability got top marks. So did being able to move around from place to place or have a business on wheels. Green advocates agreed the desire to have a happier, less complicated lifestyle motivates some. Not having to room with friends or strangers was a big plus.

Living Small and Happy in a Tiny Home

Imagine being able to stretch your arms out and touch both walls. As experiments in being one with the universe go, tiny homes are a living lab. Could you have a galvanized steel trough for a tub or a bar fridge for your green juice? Come on, climbing a ladder to get to your three-foot high sleeping mezzanine is character building. You’re up for it. It’s all in the attitude (or altitude).

Municipal Zoning and Tiny Homes in Ontario

Misfortunately for those hoping to economize, cottages, seasonal homes, campers and RVs are not tiny homes under Ontario zoning bylaws. Your tiny home must be at least 188 square feet, used year-round, private and self-contained with:

  • living and dining areas
  • a kitchen and bath connected to water and sewage
  • and sleeping areas.

Maximum sizes vary by municipality, with 400 square feet being the typical cutoff. Your home has to comply with lot size requirements, setbacks from street or lot lines and access to fire hydrants. They’re only a few of the obstacles you’ll need to leap to get approval.

Build a Tiny Home the Right Way

Let’s face it. You’re probably not up on local zoning bylaws (no second-storey ladders or sliding entry doors), parking rules or how to connect to municipal services. Any stumbles along the way can cost time and money, especially since your tiny home has to meet the Ontario Building Code. Hiring a registered building code designer, planner, architect or engineer can ensure you get a passing grade on building permits and approvals.

Parking Your Tiny Home

Now that your home is built, you’ll need a place to put it. Tiny homes that meet CSA (Canadian Standards Association) guidelines and are on wheels are treated like RVs. They can be parked in campgrounds or RV lots you buy or lease. Caveat: recreational lots only allow you to stay 180 days a year. Expect to see a lot of the countryside if you opt for that.

Put a Tiny Home in Your Own Backyard  

Living in your own or someone else’s backyard can appeal if you’re a homebody. You could bring in rental income by leasing out your current home and living in your tiny treasure. Provided your lot is big enough, many municipalities allow a secondary dwelling.  

Mortgaging Your Tiny Home in Ontario

Which brings us to financing a tiny home. Lenders want to know two things:

  1. Does your home meet municipal bylaws for minimum habitable structures?
  2. Does it conform to the Ontario Building Code?

And unless you are planning on buying or building a mini-mobile home, you’ll want to anchor your home to a foundation. Getting a mortgage will depend on it. 

Why Tiny Home Mortgages Are Hard to Get

Structures tied to a foundation are more physically stable, which is why lenders prefer to finance bricks and mortar to a tiny home on wheels. Stick-built homes are built to a higher standard than temporary structures such as garden sheds or older mobile homes. Lenders, who rely on your home to last at least 50  years, protect their investment by restricting financing terms for moveable structures. Resale value also matters. Tiny homes tend to go down in value, making them less lucrative for lenders.

Other Ways to Finance Your Tiny Home

If you hit a brick wall at the bank, try a tiny home builder or seller. They often offer financing in three stages: one-third each as a deposit, after doors and windows are installed (lock-up stage) and on delivery. Finally, when all else fails, borrow from family or take it from your RRSP or TFSA. A tiny house may cost you less than a downpayment on a condo or townhouse. It’s money well worth it for the pleasure of living in your own backyard.

Legal Services for Ontario Home Buyers

Axess Law Ontario real estate lawyers help you complete the sale or purchase of a tiny home. Arrange a video call and e-signing appointment anywhere in Ontario by dialing toll free to 1-877-552-9377 or 647-479-0118 in Toronto or using our online booking form. Licensed real estate lawyers are available to meet in person at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices.  Convenient day or evening appointments are available.
Click here to learn more about Axess Law’s real estate law services.

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