Getting a mortgage for pre-construction in Canada
By Dinesh Jindal, licensed REALTOR® · Reviewed November 2026
With pre-construction you sign today and borrow later. Plan for the mortgage you will need at closing, not the one you could get now.
Step by step
- Pre-approval at signing: many builders ask for one within a set period after you sign, especially for freehold homes.
- Stay qualified: avoid new debt and keep your income documented through construction.
- Full approval near closing: your lender reviews income, credit and an appraisal of the finished home.
- Funding at final closing.
Rules to know
- Stress test: you qualify at the higher of your contract rate plus 2% or the minimum qualifying rate.
- Insured mortgages: available on homes up to $1.5 million with less than 20% down.
- 30-year amortization: for first-time buyers and buyers of new builds on insured mortgages.
- Rate holds: most last a few months; some lenders offer longer holds for new construction.
Risks to plan for
- Appraisal gap: if the home appraises low, you fund the difference.
- Rate changes: higher rates at closing reduce what you qualify for.
- Income changes: a new job or self-employment can complicate approval.
Dinesh works with mortgage professionals who specialise in new construction. Try the mortgage calculator or book a call.
Quick answers
When do I get my mortgage for pre-construction?
Your mortgage funds at final closing, often years after you sign. You may get a pre-approval at signing, but the full approval is done close to completion, on your income and rates at that time.
Can I get a 30-year amortization on a new build?
Insured mortgages can have a 30-year amortization for first-time buyers and for buyers of newly built homes, under the federal rules in force since December 2024. Confirm eligibility with your lender.
What if the home appraises below my purchase price?
The lender bases the mortgage on the lower appraised value, and you must make up the difference in cash on closing.
General information, not legal, tax or financial advice. Programs, limits and rebates change; confirm current rules with Dinesh Jindal, your real estate lawyer and your mortgage professional before you sign.