A Purchase Plus Improvements Mortgage is ideal for qualified buyers looking to purchase a home that needs upgrades — whether it's cosmetic improvements like flooring or a complete kitchen or bathroom renovation. This program allows you to make those changes immediately after closing, with the renovation costs rolled into your new mortgage.

With today's tighter lending rules and refinance restrictions, especially for buyers with lower down payments, accessing funds for renovations later on isn't always easy. If you plan to renovate within the first few years of owning your home, this program is well worth discussing with your mortgage professional during your pre-approval stage.

How It Works:

• Eligible Improvement Funds
  Every lender is different when it comes to purchase plus improvement programs. With most lenders you can access up to 20% of the purchase price, capped at $40,000, unless you're putting down 20% or more — in which case higher amounts may be available. Funds must be used for value-adding improvements that are permanently attached to the property (e.g., windows, flooring, kitchen cabinets). Items like appliances are not eligible.
• Quotes Required Upfront
  You’ll need detailed quotes for all proposed improvements while your mortgage is being arranged. The total renovation amount is added to the purchase price, creating an “as-improved value” that the lender and mortgage insurer will assess. Your down payment is calculated based on this higher amount.
• Funds Held Until Completion
  On possession day, the mortgage is funded based on the original purchase price. The renovation funds are held in trust by your lawyer or lender and released once the work is 100% complete.
• Who Can Do the Work?
  Depending on the lender and project you can use a company, contractor, or do the work yourself, however, generally lenders will require an inspection on the property once complete to ensure; the work being done was what the lender agreed to (original quotes) and that it was done satisfactorily.

• Verification Process
  To release the renovation funds, you may need to provide:
• An inspection report completed by a certified appraiser (depending on improvements/lender this may not be required)
• Paid receipts
• Photos of the completed work (if an inspection is required this is included in the report)
  
  
• Under/Over Budget?
• If the renovations cost less than quoted, the unused funds are applied to your mortgage as a lump sum prepayment.
• If they cost more than quoted, you’ll only be reimbursed up to the original quote amount. So, it’s okay to err on the high side with your estimates.
• Timeline for Completion
  Lenders typically allow 90 to 120 days to complete renovations while some lenders will allow up to 1 full year to complete the renovations.

Key Benefits:

• Access to insured mortgage rates —lower than unsecured financing.
• Broader choice of homes — you can consider fixer-uppers in your desired area.
• Build equity faster — by improving your home right from the start.
• Tailor your new home to your style, needs, and comfort.

This is one of the most flexible and rewarding mortgage options available — especially if you're handy or have a clear vision for your space. This program is available at the best rates, both fixed and variable, and may allow you to consider a wider range of homes to purchase. If you're considering it, speak with your mortgage broker early in the process to make sure it’s structured correctly from the start. Using a mortgage broker for this product has big advantages as each lender offers something unique on their purchase plus programs so your broker can help you choose which lender will best suit you.