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Mortgaging Laneway Suites

Refinance your home to build a laneway suite in metro Toronto. 

Axess Law works with your mortgage lender to arrange long-term financing for backyard income properties.

Laneway suites are the perfect alternative to burdensome and illegal non-conforming rental units. They’re a reliable mortgage helper for the life of your home.

What’s New in Affordable Housing in Toronto

New 2021 City of Toronto laneway suite initiatives allow you to borrow up to $50,000 to build a new home in Ontario. Provided your property qualifies, you may be eligible for a 15-year forgivable loan from the Affordable Laneway Suites Program. All you have to do is:

  • keep rents affordable – no more than the annual City of Toronto average market rents for affordable housing for the entire 15 years
  • rent to single tenants making $63,400 or less or $96,000 for two or more tenants
  • get a building permit before you start
  • meet zoning and other bylaws
  • sign an affordable laneway suites contribution agreement
  • and be approved in advance for the development charges deferral program for ancillary secondary dwelling units.

Qualify for a Laneway Suite in Toronto

You may qualify if your residential property:

  • is in a R, RD, RS, RT or RM zone in Toronto East York 
  • abuts a public rear or side lane for at least 3.5 metres – private lanes don’t qualify
  • and is between 5.0 and 7.5 metres from the suite, depending on building height.

Your laneway suite must be no more than 10 metres long, eight metres wide and two storeys high and take up 30% or less of your lot. It can have a single unit with two bicycle parking spaces, but no other parking spaces are required. 

You can be as creative as you want, within zoning and bylaw regulations. Depending on their size and location, for example, decorative columns, decks, canopies and other embellishments are allowed. 

How to Apply for a Toronto Laneway Suite

Your application goes to the City of Toronto Housing Secretariat, along with proof you have a Toronto Building permit and are approved for the development charges deferral program for secondary dwelling units.

The secretariat sends you or Axess Law an affordable housing funding agreement to sign. Our real estate lawyer registers a mortgage or charge on title to your property for the loan amount. Approval from your current mortgage lender is needed. We negotiate that for you. 

Any funds you receive from the Residential Rehabilitation Assistance Program or Toronto Renovates Program will be deducted from the $50,000. Two quotes from building contractors are required with your application. The city will fund the lowest quote, up to a maximum of $50,000.

You provide the mortgage or charge document to the city, with a request for payment. Your confirmation letter from the city is proof funding is approved and construction can start. Don’t proceed until you have confirmation (prevent contractor’s liens), but you must begin construction within 120 days.

When your suite is complete, submit a request for final payment. Your tenants can now move in.

Who’s Building Laneway Suites

Nearly a quarter of Ontario homeowners have illegal suites in homes they bought or built. 

While they may bring in rental income, they could get you fined by bylaw inspectors. You may even be forced to start over just to meet city building codes. Is the expense and effort really worth it?

Having a laneway suite can increase your property’s appraised value. Future buyers see potential tenants or space for granny, financially dependent adult children or university students living at home. As long as they pay rent and meet the income threshold, anyone other than the actual homeowner can live there. 

Mortgage lenders calculate the income the suite brings in when deciding how much you or buyers can borrow against the home’s equity.

Mortgages for Income Properties

You’re way ahead with a laneway suite, especially when you can borrow to build. If you need more than $50,000 for your construction project (we assume you will), consider remortgaging your home

Refinancing consolidates mortgage debts. That keeps interest rates lower than applying for private mortgages or using a HELOC or home equity line of credit. 

And it allows you to use the value in your home to generate income.  

Why Building Permits Are Required

Municipal building permits make construction projects legal. Contractors can apply or help you obtain one. Provided construction starts within 12 months, your permit is valid up to your completion date. Starting development of any renovation or new construction without a building permit can get you fined. Just like an illegal suite, you may have to deconstruct your project.  

Why You Need a Lawyer

When you need a licensed mortgage refinance lawyer, call Axess Law. We work with  your bank, credit union or private lender to refinance your home. 

We search titles to your property for financial liens or municipal assessments that may need waiving or resolution to renegotiate your mortgage. We know you may have questions to ask a real estate lawyer. Axess Law meets with you, at your convenience, in person or via video conference. 

Our cheap land transfer lawyers (Toronto area or Ottawa) make joint tenancy arrangements to transfer part ownership in your property to a spouse or family member. Pay land transfer taxes or organize land registry discharge of mortgage documents — just ask us. 

Hire a Licensed Real Estate Lawyer

Axess Law real estate lawyers are licensed and charge low flat fees to keep your mortgage refinancing costs reasonable. You pay $799.99 to refinance a mortgage or $699.99 to transfer title to property anywhere in Ontario. 

Our online form makes booking quick and easy. Make in-person appointments or book remote online video calls in minutes. Or dial toll free to 1-877-402-4277 from Ottawa or outside the GTA (1-647-479-0118 in Greater Toronto Area) to drop by Axess Law offices near you.

We have mortgage lawyers who can go online anywhere in Ontario or meet in person, day or evening, 7 days a week.


It was a pleasure working with Patricia from Axess Law. It was my first time purchasing a home, and was very nervous about every step in the process. I called and emailed Patricia several times with the silliest questions. She answered them all promptly, and provided the best customer service I could ask for. I would recommend Axess Law and particularly Patricia to everyone.

c Cindy Tran

In the past I had to make appointments and waited for days to see a lawyer. Now conveniently this office is at my neighborhood supermarket. I was able to walk in and get my documents signed in less than 30 minutes The staff are courteous and professional. I would recommend anyone. Prompt service.

Joy Stewart Joy Stewart

I am writing this review on behalf of my daughter who completed her first Real Estate condo transaction with AxessLaw. Besides just helping my daughter as a client, they helped her understand every single step involved in the process and the whole process was completed without any problems. I would recommend them to anyone looking for hassle free real estate transaction without thinking twice.

icon Irene Tucker


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