Construction Mortgage

Construction mortgages are tailored for borrowers building a new home or undertaking major renovations. Unlike traditional mortgages, funds are released in stages—known as draws—as construction progresses. Lenders evaluate the project based on the “as-complete” value, construction plans, permits, and borrower qualifications. A typical down payment ranges from 20% to 30% of the land or project value. In Canada, both institutional and private lenders offer construction financing, with private options providing more flexibility for unique or complex builds. Inspections are often required before each draw to ensure milestones are met before funds are advanced.