Construction Mortgages

What you need to know before you begin building.

Building a home is complicated; your low mortgage rate shouldn’t be. There are several types of new construction financing out there, but they fall into three general categories.

  • Hire a contractor to build your house
  • Build your house yourself
  • Buy a newly constructed house

The Three Types of New Construction Financing

  • Customer has entered into an agreement with a registered builder to build their home. The builder requires financing draws. 
Options: Completion Mortgage or Progress Draw. 

  • Customer wants to act as his or her own contractor. They wish to hire sub trades to complete the work. Options: Completion Mortgage or Progress Draw. 

  • Customer requires funds when the home is 100% complete.

Completion Mortgage

You have purchased / built your home through a residential home builder and only require funds when the house is 100% complete (sometimes they require a small deposit to start). This is simply a regular best mortgage rate.

Progress Draw Mortgage

A Progress Draw is a type of funding, which is advanced in intervals as the house is being built. A Land Draw may be required if the customer is also purchasing the land. 

Relevant Terms

  • Solicitor: A Progress Draw requires a Solicitor 

  • Progress Inspection Report: Each draw requires a Progress Inspection Report, which details the percentage complete prior to the advancement of funds. 

Interest on Draws/Advances: Interest is charged on all amounts advanced and is invoiced, then debited from the customer's account monthly.  

Final Advance: The final advance will not be released until the final inspection confirms completion.
  • Mortgage Insurance: Land draws are not available under CMHC guidelines.

With Progress Draws, there are typically three stages to building a house:

  • Roof Stage / Roof Tight – Approximately 35 percent complete. A survey is required by first draw.
  • Intermediate / Lock Up – Approximately 65 percent complete.
  • Final Occupancy / Completion – Most lenders will not issue final advance unless home is 100% complete. Seasonal holdbacks are always minor, exterior to property and weather related.

Note that draws will be issued based solely on Appraiser’s Percentage Complete Inspection Report.

Required documentation for a construction mortgage:

  • Written employment and income confirmation
  • Proof of down payment or equity
  • Copies of all quotes (if self-build) 
  • Signed contract with builder  
  • Offer to purchase for land or a copy of title
  • Full appraisal
  • Plans/ House Specifications 
  • Fire Insurance Certificate 
  • Third party warranty information, if applicable is near you. is expanding in order to serve you better! At, we are committed to providing you with the knowledge and understanding of financial products that are right for your particular situation. Click on the map markers to learn more about the mortgage brokerage office in your community. has access to best rate mortgages from coast to coast. Why pay more when you can have the lowest mortgage rate out there? So what are you waiting for - how can help you?