Purchase Plus Improvements Mortgage Canada

A Purchase Plus Improvements Mortgage lets you include the cost of renovations or upgrades right into your new mortgage.
It’s perfect if you’ve found the right home — but it needs a little work to make it truly yours.

This program allows you to finance approved improvements at low mortgage rates, instead of relying on higher-interest credit cards or personal loans.

Benefits of a Purchase Plus Improvements Mortgage

The biggest advantage is flexibility. You can complete your renovations right away, rather than waiting to save up or pay out of pocket.

This helps if the home needs essential updates to be livable — or if you simply want to increase comfort and property value immediately.

Other key benefits include:

• One easy mortgage: The home purchase and renovation costs are combined into a single mortgage.
• Lower interest rate: Renovation costs are financed at standard mortgage rates, not unsecured credit rates.
• Higher property value: Your mortgage is based on the home’s improved value once renovations are complete.
• Quality assurance: Funds are only released once the work is finished and inspected, keeping everyone accountable.

Qualifying for a Purchase Plus Improvements Mortgage

To qualify, you first need to be approved for a regular mortgage.
Then the lender reviews your renovation plans and determines how much extra you can borrow for the improvements.

For insured mortgages, the improvement amount is typically limited to 10% of the purchase price, or roughly $40,000–$50,000, depending on the lender.
Conventional mortgages (20% down or more) may allow for larger amounts.

You’ll need to provide detailed quotes for all planned work.
The appraiser uses these quotes to estimate the post-renovation value of the home, and the mortgage amount is based on that improved value.

Note: DIY projects are sometimes accepted, but most lenders prefer professional quotes and invoices.

Receiving the Funds for Improvements

After your mortgage closes, the renovation funds are held in trust by your lawyer until the work is complete.

You’ll need to pay deposits to contractors or for materials out of pocket to start.
Once the work is finished:

1. You’ll submit photos and paid invoices to confirm completion.
2. In some cases, the lender will order a progress inspection.
3. After verification, your lawyer releases the improvement funds to you.

Most lenders require 100% of the work to be complete before releasing the funds, so you’ll need to budget for short-term cash flow during renovations.

Minimum Down Payment Requirements

The down payment rules for a Purchase Plus Improvements mortgage follow Canada’s standard purchase requirements:

• 5% down for homes up to $500,000
• 5% on the first $500,000 and 10% on the amount between $500,000 and $1,499,999
• 20% down for homes $1.5 million or more

If your down payment is less than 20%, the mortgage will be insured through CMHC, Sagen, or Canada Guaranty.
Default insurance protects the lender (not you) if payments are missed and is added to the mortgage amount.

Insured Purchase Plus Improvement mortgages are available only for owner-occupied or second homes (not rentals).

Eligible Improvements

Examples of upgrades that typically qualify include:

• Kitchen or bathroom renovations
• Flooring, paint, or lighting
• Roof, windows, or insulation upgrades
• Furnace, AC, or other efficiency improvements
• Basement finishing or minor layout changes

Luxury or structural projects (like pools or additions) are usually not eligible unless the lender specifically approves them.

Amortization and Insurance

For insured mortgages (less than 20% down), the maximum amortization is 25 years.
For conventional mortgages (20% down or more), you can extend to 30 years to reduce your monthly payments.

The insured 30-year amortization rule introduced is available for first-time buyers.

Alternative: Refinance After Renovations

If you have savings or access to funds, another approach is to pay for the renovations upfront and then refinance after the work is complete.

This allows you to access the new, higher value of your home once the renovations are done and potentially recover the costs through your new mortgage.

We’ll structure your initial mortgage to make refinancing easy later — with low or no penalty options so you can switch when the time is right.

Why Work With a Mortgage Broker

Every lender has slightly different rules for Purchase Plus Improvements — from maximum improvement limits to document requirements.

As your mortgage broker, we know which lenders handle these files most efficiently and which programs best fit your renovation goals.

Through Dominion Lending Centres, we have access to over 50 lenders, including major banks, credit unions, and specialty programs.
Over half of Canadian mortgages are now arranged through brokers because of the convenience, savings, and expert advice they provide.

We work for you, not the bank — and our service is free.

Ready to Get Pre-Qualified?

You can start right now.
Click Apply Now to complete your secure pre-qualification — it only takes a few minutes and won’t affect your credit.

Once you submit your information, we’ll review your plans, confirm what you qualify for, and show you how much renovation funding you can include in your mortgage.

Prefer to talk first? Call or email us anytime — we’ll walk you through your options step by step.

Start your pre-qualification today and turn the home you found into the home you’ve always wanted.