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Purchase Plus Improvements Mortgage

Learn how a Purchase Plus Improvements Mortgage helps Canadian buyers finance both the cost of a home and needed renovations in a single mortgage.

Purchase Plus Improvements Mortgage

May 22, 2025


What is a Purchase Plus Improvements Mortgage?

A Purchase Plus Improvements Mortgage is a mortgage product that allows homebuyers to finance the cost of renovations or upgrades along with their home purchase.

Why Do Purchase Plus Improvement Mortgages Matter in Real Estate

This type of mortgage is particularly valuable for buyers who purchase a home that needs immediate updates—such as a new roof, flooring, or kitchen renovation—but may not have upfront cash available for improvements.


How it works:
  • The buyer gets pre-approved for a total mortgage amount that includes the home's purchase price and the estimated cost of improvements.
  • After closing, the renovation funds are held in trust.
  • The buyer must complete the improvements within a specific timeframe (usually 90–120 days).
  • Once the renovations are verified (with invoices or inspections), the lender releases the funds.

Eligibility requirements typically include:
  • Renovations must increase the home's value or functionality
  • Quotes or plans must be submitted in advance
  • Final mortgage approval is conditional on the scope and completion of the work


Understanding this mortgage option gives buyers more flexibility and purchasing power, especially in markets where move-in-ready homes are out of budget.

Example of a Purchase Plus Improvements Mortgage in Action

A couple buys a $500,000 home and adds $40,000 in approved renovations. Their total mortgage is $540,000 under a Purchase Plus Improvements program.

Key Takeaways

  • Combines home purchase and renovation costs.
  • Funds released after upgrades are completed.
  • Requires quotes and lender approval.
  • Useful for buying homes that need work.
  • Helps buyers afford both purchase and repairs.

Related Terms

Additional Terms

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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