Purchase plus improvements mortgage – How to get your renovations done sooner.

Purchase plus improvements mortgage

Have you been looking for a home in Nanaimo and have found one that is of interest but you feel it needs some work, such as a new kitchen, roof, windows and flooring?

If you feel this home has great bones but needs some renovations, you may be applicable for a purchase plus improvements mortgage which allows you to roll immediate renovation cost into your mortgage. You could then purchase a home and do the necessary renovations immediately in order to make the home more liveable from the moment you move in.

How it works:

  • Available for conventional and insured mortgages
  • Work must be completed within three to six months depending on lender or the fund will be recalled and applied back to the mortgage
  • Prior to doing the work, you will need to detail the improvements; receive quotes for materials and labour and provide a copy of this documentation, along with an overview of the scope of work with estimates, to your lender.
  • An appraisal with two separate values will be required, such as the value of the home prior to the improvements and an estimated value of the home with the improvements completed.
  • The Lender will be lending based on the appraisal of the home once the work is completed


Purchase price of home $300,000

Improvements $20,000.

Total mortgage $320,000. Less 5% down (16,000) Total mortgage $304,000

The entire committed amount of the mortgage will be advanced to your lawyer and the lawyer will be instructed to hold back the cost of the improvements (In this case, $20,000).

Once you have completed the improvements, you will need to supply a confirmation from the appraiser along with a copy of the building permit (if applicable) in order to have the balance released.

For certain types of renovations such as improvements that increase the energy efficiency such as heat pumps, insulation and new windows, you could also be applicable for numerous rebates. See the Vancouver Island real estate board website for the applicable rebates available in the Nanaimo area.

For more information on a purchase plus improvements mortgage, contact your lender. For a list of suppliers that I work with, please email me.