Building your dream home? Know Your Mortgage Options

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:

1. Planning Provide detailed plans, permits, and a budget. Work with a licensed builder.

2. Application Apply with a lender. You’ll need good credit (680+), proof of income, and a 20–30% down payment.

3. Funding (Draws) Money is released at key stages (e.g., foundation, framing). Each stage requires an inspection.

4. 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.