Mortgage Purchase Plus Improvements - December 2021

Kelly Hudson • December 9, 2021

Purchase Plus Improvements Mortgage

 

Not every home is move-in ready. Have you found your dream home, only to find out that it needs TLC and you need to do some renovations? The costs of renovations can really add up, and you might not be able to afford them. Luckily, there is a program that will allow you to purchase a property, that also covers the costs of renovations—a purchase plus improvements mortgage.

 

With one manageable mortgage, you can have your home — plus add in the costs of renovations — sometimes with as little as 5% down.

 

What is purchase plus improvements mortgage?

 

This program allows you to borrow the cost of renovations (up to a certain percentage) and add it to the home price, rolling it all into one easy-to-manage mortgage payment.

 

Once you take possession of your new home, you can start the upgrades immediately. This type of mortgage comes with a few extra requirements before signing, such as providing quotes for the work that needs to be completed.

 

There is a stipulation, however, that requires improvements to be permanent in nature, including items such as paint, cupboards, flooring, roofing, furnace, etc. As such, appliances and other non-permanent fixtures are not covered within a Purchase Plus Improvements mortgage. 

 

7 Steps: How the Purchase Plus Improvements Mortgage Works


  1.  You can get a mortgage approved with as little as a 5% down payment and include some home improvement costs into the mortgage amount.

  • The renovations must increase the property value. 

 

  2.  When applying for a purchase plus improvements mortgage, the contractor’s quote for the work to be completed, MUST be provided upfront to the lender, along with your offer to purchase the home. 

  • In other words, when you submit your mortgage application, lenders need to have the contractor quote(s) outlining the work to be done and what the cost will be.
  • In most cases, the improvements work will need to be done by a licensed contractor
  • Renovation Time Limits: typically, the improvements need to be completed within 90 days, (some exceptions can be made).
  • The Purchase Plus Improvements program is NOT available after the mortgage has been funded.

 

  3. The contractor(s) quote needs to outline the work to be done and the cost for said improvement. 

 

  4. Once your home purchase has completed, the homeowner must come up with the funds to complete the home improvements. Funds could come from a line of credit, credit card, store credit card (i.e. Home Depot), gifted money or credit from the contractors you will be using. The bottom line is that you need to figure out how to pay for the improvements upfront. 

  • You will not receive any funds for the renovations until after the work is completed and reviewed by the bank representative.


  5. Once the renovations/improvements have been completed, an inspection report from an appraiser is required so the lender can confirm that the improvements were completed and are good quality. 

  • Once you prove the improvements requested are finished, the lender will allow your lawyer/notary to release to you the purchase plus improvement funds


  6. Once the improvement funds are released, you use the money to pay off your improvements.


  7. With the upgrades done, and all the mortgage details taken care of, you can fully enjoy your new home-sweet-home.


 

The Purchase Plus Improvement program is available with the best mortgage rates, including fixed and variable. 

 

Purchase Plus Improvements is a great program, which may make it easier for you to decide which home is best fit for your situation.

 

Would you like more information regarding Purchase Plus Improvement mortgages? Give me a call and let’s have a chat.

 

Kelly Hudson
Mortgage Expert
Mortgage Architects
604-312-5009
Kelly@KellyHudsonMortgages.com
 www.KellyHudsonMortgages.com

Kelly Hudson
MORTGAGE ARCHITECTS
RECENT POSTS 

Joint Tenants vs. Tenancy in Common – What You Need to Know When Purchasing a Home!

By Kelly Hudson • March 6, 2026
Decisions relating to real estate can have significant financial and legal consequences. Before deciding how to share ownership of what is likely one of the largest investments of your life, I recommend consulting a real estate lawyer. Many Canadians purchase property together — including spouses, common-law partners, family members, friends, and business partners. Because ownership structure affects estate planning, taxes, creditor exposure, and control over the property, it’s important to understand your options before you sign. In Canadian property law, there are two primary forms of co-ownership: Joint Tenancy Tenancy in Common While these terms may sound similar, they have very different legal and financial effects — particularly if one owner dies, sells their interest, separates, or faces creditor claims.

Reverse Mortgages in Canada: The Pros and Cons

By Kelly Hudson • February 18, 2026
If you’re 55 or older and own your home, chances are you’ve heard about reverse mortgages. Sometimes they’re described as a “retirement lifesaver.” Other times they sound risky or confusing. The truth? They’re neither magical nor terrible. They’re simply a financial tool — and like any tool, they work well in some situations and not so well in others – EDUCATION is the key! Let’s break it down in plain English. So… What Is a Reverse Mortgage? A reverse mortgage allows you to borrow money against the value of your home — without making monthly mortgage payments. Instead of you paying the lender every month, the interest gets added to the balance. The loan is typically repaid when: The home is sold You move out permanently Or you pass away In Canada, reverse mortgages are currently offered by: HomeEquity Bank (CHIP Reverse Mortgage) Equitable Bank Bloom Financial You still own your home and your name stays on title. That part often surprises people. How It Works (Simple Version) To qualify: You must be 55 or older You must own your home (you can still have a regular mortgage — it just needs to be paid out) You can usually borrow up to about 55% of your home’s value (the older you are, the more you may qualify for) You don’t make monthly payments. But you must continue to: Pay property taxes Keep home insurance in place Maintain the home The money you receive is tax-free. It can come as: A lump sum Monthly advances Or a combination of both That flexibility is one reason many retirees like this option. Why Do People Consider Reverse Mortgages? Most of the homeowners I speak with aren’t looking for luxury spending money. They’re trying to solve real life situations: Covering rising living costs Paying off debt before retirement Managing health or care expenses Staying in their home longer Helping adult children with a down payment For many Canadians, their house is their largest asset — but it doesn’t create monthly income. A reverse mortgage turns some of that home equity into usable cash. The Pros (The Reasons People Like Them) 1. No Monthly Mortgage Payments This is the big one. If you’re living on CPP and OAS, removing a monthly mortgage payment can dramatically reduce stress. Cash flow improves immediately. 2. You Can Stay in Your Home Most people I meet don’t want to move. They love their neighborhood. Their friends are nearby. Family visits often. A reverse mortgage can allow you to age in place instead of selling before you’re ready. 3. The Money Is Tax-Free Because it’s borrowed money — not income — it does not affect: Old Age Security (OAS) Guaranteed Income Supplement (GIS) That’s a major advantage compared to withdrawing from investments. There are no rules about spending. Some clients use the funds to stay in place – health care at home. Some clients renovate. Some travel. Some gift funds to children. Some simply create a safety cushion. It’s your equity – you decide. 5. You Keep Ownership The bank does not own your home. As long as you live in your home, maintain it, insure it, and pay property taxes — you own your home and can stay. 6. No Negative Equity Guarantee In Canada, reverse mortgages include protection so that you (or your estate) will never owe more than the home is worth — even if property values decline. That protection matters.