Before closing
Get itemized contractor quotes and lender approval for the scope, budget and expected value after improvements.
Purchase plus improvements mortgage
The right home.
Room to make it yours.
Finance approved renovations as part of a home purchase. The work must be planned before closing, and improvement funds may be held back until the lender verifies completion.
Understand how the money moves
The detail that changes the plan
Approved renovation money may arrive after the work.
At closing
The home purchase completes. The lender or closing professional may retain the approved renovation amount as a holdback.
During the work
You may need other available cash to pay contractors before funds are released. Keep contingency money for changes and delays.
After verification
Provide the required completion evidence or inspection. The lender authorizes release under the agreed conditions.
Funding arrangements vary by lender and insurer. Confirm the holdback, completion deadline and release requirements in writing.
Keep the scope specific
A renovation plan the lender can assess.
An approved, itemized project is easier to assess than an allowance for “renovations later.” The lender needs to understand the work, who will complete it and the value it adds.
Eligibility, maximum improvement amounts, required permits and whether structural work is allowed depend on the program. Do not assume every renovation or a do-it-yourself project will qualify.
- Clear scope and contractor quotes before the mortgage is finalized
- Expected completion date and any required permits
- Support for the property’s value after the improvements
- Cash to cover deposits, progress payments and contingencies
Price the whole purchase
Keep three budgets in view.
Clear answers
Before you decide
What is a Purchase Plus Improvements mortgage in Canada?
It is a mortgage structure that allows an eligible buyer to include approved renovation costs in the financing when the work is planned before closing. The purchase usually funds first, and the improvement amount is commonly managed through a holdback and release process once the work is completed and verified.
When are renovation funds released?
The release timing depends on lender and insurer rules, but many programs hold back the improvement amount and release it after the work is completed and the required verification, such as invoices, photos, or inspection support, has been provided.
Do I need contractor quotes before approval?
Usually yes. Itemized quotes are commonly required because the lender and insurer need a clear, pre-approved scope and improvement amount instead of a rough renovation idea.
Can I change the renovation scope later?
Scope changes can create problems because the approved improvement budget is tied to the original renovation plan. Some changes may need to be paid outside the program or handled with separate financing.
Is Purchase Plus Improvements better than a HELOC?
It can be better when the renovation is known before purchase and the buyer wants the work built into the original mortgage structure. A HELOC can fit better later, or for more flexible future borrowing, but it is a different product with different timing and rate behavior.
What kinds of renovations usually fit this program?
Defined upgrades like kitchens, bathrooms, flooring, paint, windows, fixtures, and other clear livability or value-added improvements are more common fits than open-ended structural redevelopments or uncertain project scopes.
Rules & references
How we prepare our guidanceSources checked September 6, 2026. Lender approval and product eligibility depend on your complete application.
Pragmatic Mortgage Lending · BC & Alberta
Bring the listing and your renovation idea.
We’ll help you understand whether the financing fits, what the lender needs and how to fund the work before the holdback is released.