Other Services
Construction mortgages
A build does not need one lump sum — it needs money at the right moments. A construction mortgage releases funds in stages as the work is completed and verified, then becomes an ordinary mortgage once you have occupancy. The financing is the straightforward part — the cash flow between draws is where builds get uncomfortable, so that is what we plan for first.
What this covers
Funds released in draws as construction progresses
Interest generally paid only on what has been advanced
Converts to a standard mortgage once the build is complete
How the draws actually work
Rather than funding at once, the lender advances money in stages that follow the build — commonly after the foundation, at lock-up, and on completion, though the exact schedule varies by lender and project. Each draw is released only after an inspection or progress appraisal confirms the work claimed has genuinely been done. The money follows the build; it does not lead it.
What lenders want to see before they commit
A fixed-price contract with a registered builder, permits, drawings, a line-item budget, evidence of the land’s value and how it was acquired, and a schedule that a reasonable person would believe. Contract builds with an established builder are considerably easier to place than self-builds or owner-managed projects — not impossible, but the file has to be stronger and the contingency larger.
The cash flow gap nobody warns you about
Because each draw arrives after the work is verified, someone has to carry the cost of that stage in the meantime. Sometimes that is the builder, sometimes it is you, and it needs to be agreed in writing before the first shovel — not discovered in month three. When a build goes wrong financially, this is almost always why. I will walk the draw schedule against your builder’s payment terms with you before we submit anything.
Interest during the build, and what happens after
You generally pay interest only on the amount advanced so far, so payments start small and climb as the build progresses. Budget for that ramp alongside your rent or existing mortgage, because for most of the build you are paying for two homes. Once construction is finished and occupancy is granted, the loan converts to a standard mortgage with regular principal-and-interest payments.
Ontario specifics worth knowing early
New homes built by registered builders in Ontario come with Tarion warranty coverage, and new construction is treated differently from a resale purchase for HST — there is a new housing rebate, and whether it is credited by the builder or claimed afterward depends on your arrangement. These are questions for your accountant and your lawyer, and they are much cheaper to ask before closing than after.
Where I fit
I will help you line up a construction mortgage that matches your builder’s schedule rather than fighting it, and stay on the file through the draws. Where a project needs a lender outside my licence, a Level 2 colleague on my Pineapple team places it and I stay involved with you.