Building your dream home? Know Your Mortgage Options
- Solmaz Esmaeili
- Jun 19
- 1 min read
Construction Mortgage in Canada – A Quick Guide
A construction mortgage helps finance building a new home or major renovations. Unlike a regular mortgage, funds are given out in stages (called “draws”) as the project progresses.
Key Steps:
Planning Provide detailed plans, permits, and a budget. Work with a licensed builder.
Application Apply with a lender. You’ll need good credit (680+), proof of income, and a 20–30% down payment.
Funding (Draws) Money is released at key stages (e.g., foundation, framing). Each stage requires an inspection.
Mortgage Conversion After completion and final inspection, the loan converts to a regular mortgage with full payments.
Key Requirements & Considerations
Builder: Must be licensed ,exception may apply
Inspections: Required at each stage, paid by you
Rates: Often higher than regular mortgage
Final Tips
Work with a broker experienced in construction mortgages.
Have clear plans and a solid budget.
With the right help, you can successfully build your dream home.
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