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.
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
- Mortgage Pre-Approval
- Home Renovation Loan
- CMHC Insurance
- Mortgage Financing Options
- Improvement Quotes
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)