BREAKING: Bank Of Canada Holds Interest Rate Steady In Second 2026 Decision

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

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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