A construction loan funds a build in stages rather than in one advance. Money is released as the work reaches agreed milestones, each confirmed by an inspection, which is why it is also called a draw mortgage.
The brokers listed here arrange construction financing across Canada for self-builds, custom homes and major renovations. It is a different discipline from a purchase mortgage, and the lenders who do it well are not always the ones you would expect.
The brokers below have told us they take on construction files. Narrow by city to see who works in your market, most lending decisions still turn on where the property sits.
2 of these brokers have a mapped office. Tap a pin to open that profile.
As Licensed Principal Broker, I’m dedicated to providing you with all the information you need to make a well-informed decision on your mortgage financing needs. My mortgage industry knowled…
As a Level 2 Mortgage Broker serving clients across Ontario, I help individuals, self-employed professionals, investors, and business owners secure financing tailored to their needs. My serv…
I’m a Mortgage Agent Level II based in Sturgeon Falls, serving North Bay, Sudbury and clients across Ontario. I work with first-time buyers, homeowners, investors and anyone looking for a be…
The lender advances against completed value, not against invoices. An appraiser or inspector confirms the stage is finished, and the lender releases that portion less a statutory holdback retained against builders' liens.
The consequence is that you fund each stage before you are paid for it, from your own money or from a builder willing to carry the work. Under-planning that gap is the most common way a self-build stalls, and it is entirely avoidable with a cash-flow schedule built before the first draw.
Fixed-price contracts with a licensed builder, full drawings, permits, a realistic contingency, and evidence the total cost is covered, not merely the loan. Owner-builders face more scrutiny than those using a contracted builder, and some lenders decline them entirely.
Interest during construction is usually charged only on drawn funds, and many lenders let it be capitalised rather than paid monthly. On completion the loan converts to a standard mortgage, and that conversion should be negotiated at the outset rather than left to the end.
Funds are advanced in stages as the build progresses. Each draw is released after an inspection confirms the stage is complete, less a statutory holdback for builders' liens. Interest is charged only on what has been drawn, and the loan converts to a conventional mortgage once the home is finished.
Another name for a construction mortgage. It describes the mechanism: the lender releases the loan in draws tied to construction milestones rather than in a single advance at the start.
More than for a purchase. Lenders assess the completed value and lend a percentage of it, so you cover the balance plus a contingency. Owner-builders are usually asked for more than borrowers using a contracted builder with a fixed-price agreement.
Yes, where the work is substantial enough to change the value of the property meaningfully. For smaller projects a purchase plus improvements mortgage or a home equity line of credit is usually simpler and cheaper than full construction financing.
A portion of each draw the lender retains, required by provincial lien legislation, and released after the lien period expires once the work is complete. It protects against unpaid subcontractors registering a claim against the property, and it is a normal part of every draw.
