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Construction Mortgages

Thinking about building? Here’s what you need to know.

Building a home is complicated; your low mortgage rate shouldn’t be.

Here’s a simplified look at the three different types of new construction financing available in Canada:

1) Builder/Contractor built home with your money: Customer has entered into an agreement with a registered builder to build their home.

  • Mortgage Options: Completion Mortgage or Progress Draw

 2) Self-Built Home: Customer wants to act as his or her own contractor.

  • Mortgage Options: Completion Mortgage or Progress Draw

3) Builder built home with their money: Customer requires funds when the home is 100% complete. 

  • Mortgage Options: Completion Mortgage

Completion Mortgage

You have purchased / built your home through a residential homebuilder and only require Canadian mortgage rate funds when the house is complete.

Progress Draw Mortgage

Type of funding that is advanced in intervals.  

Relevant Terms

  • Solicitor: A progress draw requires a solicitor.
  • Progress Inspection Report:Details progress prior to the advancement of the best mortgage rate funds.
    • Interest on Draws/Advances: Interest is charged on all amounts advanced.
    • Final Advance: Released upon final inspection confirming completion.
    • Mortgage Insurance: Land draws are not available under CMHC guidelines.

Completion Stages

There are typically 3 stages to building a house:

  • Roof Stage / Roof Tight – Approximately 35% complete.
  • Intermediate / Lock Up – Approximately 65% complete.
  • Final Occupancy / Completion – 100% complete

Required Documentation

  • Written employment and income confirmation
  • Proof of down payment or equity
  • Copies of quotes
  • Full appraisal
  • Plans/ House specifications
  • Fire insurance certificate     

Need help hammering out the details of your construction mortgage? Contact for expert advice.