Mortgage a Backyard Tiny Home in Ontario

Tiny home, tiny life? Surprisingly enough, a tiny home can feel spacious for people who like living small.

Add a mortgage or borrowed financing to your 400 sq. ft. (37m²) or less slice of paradise and you could have an affordable home.

Quick Read

What’s tiny home living like?

Why tiny homes are so appealing

Are tiny houses legal in Ontario?

Where can you live in a tiny home in Ontario?

Who can build a tiny home

How much does it cost to build a tiny home in Ontario?

Backyard in a tiny home in Ontario

Living Small and Happy for Tiny Home Ontario Owners

Imagine being able to stretch out your arms and touch both walls. Tiny homes are a living lab in social psychology. Could you have a galvanized steel trough for a tub or a bar fridge for your groceries? Climbing a ladder to get to your three-foot high sleeping mezzanine is character building. It’s all in the attitude (or altitude).

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.

Municipal Zoning and Tiny Homes in Ontario

Unfortunately 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 sq. ft. (37m²) 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 could encounter.

Build a Tiny Home the Right Way

Anyone can build a tiny home in Ontario, but any stumbles along the way can cost time and money, especially since your tiny home has to meet the Ontario Building Code. And factory-built tiny homes require two building permits — for the municipality where the home is built and the location where it will be placed and occupied. See meeting permit and inspection requirements for a tiny home in Ontario. 

Hiring a registered building code designer, planner, architect, or engineer can ensure you get a passing grade on building permits and approvals. We know  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. Read this guide to building a tiny home in Ontario before you start. Call the Electrical Safety Authority toll free at 1-877-372-7233 to verify electrical safety standards new homes must meet. 

The Cost of a Tiny Home in Ontario (Canada)

DIY builders estimate the cost to construct a tiny home in Ontario at $20,000 to $40,000. Factory or custom built winterized models can be $125,000 or more. The design, amenities like a full-height bedroom with ensuite, whether you build or buy, and location determine what you pay for a tiny home. 

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 travel frequently 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.

Why You Need a Real Estate Lawyer

Virtual Real Estate Lawyers in the GTA or Ottawa. Axess Law’s virtual lawyers go online with you anywhere you are, 7 days a week. Use our secure, confidential remote conferencing software to review agreements of purchase and sale or close a deal before your deadline is up. Use any compatible home computer, laptop, tablet, or smartphone to network with us. We show you how. Sign from the comfort of your home or office with virtual closings

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 1-877-402-4207 or 647-479-0118 in Toronto or using our online booking form. Our licensed real estate lawyers can meet you in person at any of our conveniently located Greater Toronto Area or Ottawa law offices. Convenient day or evening appointments are available.

Click here to learn more about Axess Law’s real estate law services.