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Construction Mortgage in Toronto

How to Get Mortgage for Home Construction

Constructing your own home is exciting and one that many Toronto residents are undertaking. Why live in a home designed and built for another family with a different lifestyle when you can customize a home to your lifestyle?

So you got yourself into home construction, what are your options in terms of a mortgage? At Toronto Mortgage Brokerage we offer a number of different options for a construction mortgage. Whether you are a builder yourself, employing a contractor for building, or are a buyer of a new home there are unique solutions available for you. Building a custom home is a popular trend in Canada at the moment because it allows to include all the features and designs that reflect your personal tastes. Such projects require sufficient financing and preparation, however.

Documents That You Need to Apply for Construction Mortgage

Construction financing, when done properly, is a quick and efficient process. As a builder there are a number of documents that you need to obtain and provide. Examples include: building plans, specifications, proof of down payment, fire certificate and more. Our specialists will make sure that you are not missing anything that is needed and will save you many on the processes.

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Featured Rates

FIXED

LenderRateTerm
Mortgage Lendwise RateLendwise

3.40%

5-Year
Mortgage First National Bank RateFirst National Financial

3.59%

4-Year
Mortgage RMG RateRMG Mortgages

3.29%

3-Year
Mortgage Street Capital RateStreet Capital Bank

3.19%

2-Year
Mortgage TD Bank RateTD Bank

3.19%

1-Year

VARIABLE

TermRate
5-Year Variable

2.75%

3-Year Variable

3.35%

OTHER

TypeRate
Line of CreditStarting at

3.00%

Equity LoansStarting at

5.99%

Private MortgagesStarting at

5.99%

Qualifying for a Construction Mortgage in Toronto

Qualifying for construction mortgage sometimes called a self-build mortgage is very different to qualifying for finance on an existing property. Mortgage providers will require a lot more information from you and you will have to make a bigger down payment on the property than on an existing home. This is typically anything from 25% to 30%
When planning to construct your own home, you’ll have to work with the contractor to produce drawings, timelines and cost estimates before you approach the financial institution to seek funds.

Most lenders will want assurances that the construction will be completed in a certain timeframe. They may want proof that the builder is certified and has a portfolio of previously well-built homes.

Toronto financial institutions deem the mortgage risk of construction to be greater than that on an existing home and for this reason, they will finance the construction as it reaches various stages and will not part with the full funding until the construction is complete.
The institution will require

  • Proof of income
  • Credit history
  • Building plans and estimates

Types of Construction Mortgage

In Canada, there are two types of construction mortgage available, a process-draw mortgage and a completion mortgage. If you have a completion mortgage transfer of the money will only take place upon completion of the construction or when you take occupation.
Because the funds are transferred on completion you can usually make changes to the mortgage up to thirty days before you take possession. This gives you the flexibility to ask for additional amounts if there are overruns.

On the other hand, during the completion time, your life’s circumstances could change and you may not qualify for the mortgage that you did when you applied.
The progress draw is typically paid out as the construction progresses, with payments made at 35%, 65% and 100% completion. For the lender, the progress draw mortgage is much riskier. The incomplete building is collateral on the loan. In the event of default, the lender could have an incomplete home that may not cover the full amount of the loan.

Types of Construction

There are three types of construction

  • Self-built
  • Contractor built
  • Purchase of a newly constructed home – a great option for those who want a new home but don’t want to go through planning and construction

The first two will qualify for progress draws or completion mortgage, the last will require a completion mortgage.
Because of its complexity, it is best to consult a mortgage broker before applying for a construction mortgage. The expert consultants at Certified Mortgage Brokers Toronto can help you every step of the way.

Variety of Rates for Construction Mortgages in Toronto

Get Your 0% Mortgage in TorontoWe can help you finance the amount of money needed to purchase a new property, and/or cover construction costs to build the house of your dreams.

Contact Us to Get 0 percent mortgages TorontoContact us today to arrange an in depth private consultation. We will support you throughout the whole process and inform of you of all the details that you need to know. With Toronto Mortgage Brokerage you can build your dream home and have a peace of mind with regards to financing and mortgage.

OUR CUSTOMERS LOVE US

My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Linderman Beadles
Linderman Beadles
06:16 26 Feb 18
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Gina Carroll
Gina Carroll
05:06 28 Feb 18
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Deane Laflamme
Deane Laflamme
04:40 27 Feb 18
My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Stephnie Boyles
Stephnie Boyles
13:59 15 Nov 17
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Billye Peralta
Billye Peralta
13:38 19 Nov 17
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Moore Hoover
Moore Hoover
02:25 16 Nov 17
We worked with Leon and he provided a thorough and a professional process in re-financing our mortgage. Communication was consistent, he was easy to reach and documents were processed quickly. Most importantly, we got a great rate that has us savings hundreds of dollars per month on our home. These guys really know what they're doing.
Melissa Brown
Melissa Brown
00:12 18 Jul 17
As third time home buyers we couldn't be happier with the service we got from Certified mortgage broker. The team did a great job working on our loan. Everything was fast, easy and transparent. Probably the best mortgage experience i’ve ever had.
Riley Clements
Riley Clements
15:27 20 Jul 17

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