Draw Schedule
Learn about draw schedules in Canadian construction financing — what they are, how they work, and why they reduce risk.
July 28, 2025
What is a Draw Schedule?
A draw schedule is a payment plan used in construction financing that outlines when and how funds will be released to the builder or contractor as work progresses.
Why Draw Schedules Matter in Real Estate
In Canadian construction, draw schedules help lenders control risk by tying disbursements to project milestones verified by inspections.
Key features:
- Payments released at defined stages (e.g., foundation, framing)
- Reduces risk of incomplete or faulty work
- Ensures project cash flow aligns with progress
Understanding draw schedules helps developers and contractors manage expectations and maintain project timelines.
Example of a Draw Schedule in Action
The construction loan included a draw schedule releasing funds after each stage was inspected and approved by the lender.
Key Takeaways
- Ties construction funding to progress milestones
- Reduces lender and owner risk
- Requires inspections to trigger payments
- Helps maintain cash flow discipline
- Common in construction loans and contracts
Related Terms
- Construction Loan
- Holdback (Construction Financing)
- Hard Costs (Construction)
- Soft Costs (Construction)
- Permanent Financing
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)