Construction Mortgages in Toronto
Financing built in stages — like the house.
A construction mortgage advances funds in draws — typically at foundation, lock-up, drywall, and completion — against staged appraisals. Toronto teardowns, custom builds, and major additions need a lender who underwrites both the borrower and the build.
Who this is best for
- Custom home builders on a Toronto lot
- Teardown-and-rebuild buyers
- Major addition / second-storey projects
- Owner-builders with a qualified general contractor
How a Toronto mortgage broker helps
- Matches your build type to a construction-comfortable lender
- Coordinates the staged appraisal and draw schedule
- Plans the conversion to a regular mortgage at completion
- Reviews the contractor and budget package with the lender
What lenders typically look at
- Detailed build budget and contractor agreement
- Staged appraisals of land + as-complete value
- Down payment / equity 20%+ typically
- Borrower qualifies on the final mortgage amount
- Construction insurance and permits required
Documents you'll likely need
- Land purchase or current mortgage statement
- Building permit
- Contractor agreement and budget breakdown
- Architectural drawings
- Borrower income and ID
A Toronto example
Etobicoke teardown rebuild
An owner of an Etobicoke lot rebuilding a 3,000 sq ft home is reviewed for a construction mortgage with draws at foundation, lock-up, drywall, and completion, then converted to a 5-year fixed at occupancy.
Frequently asked questions
+How many draws are typical?
Most construction mortgages release funds in 3–5 staged draws against appraised completion percentage.
+Do I pay during construction?
Most lenders charge interest-only on funds advanced, then convert to a regular amortizing mortgage at completion.
+How much down do I need?
Generally 20%+ of the as-complete value, often combining land equity and cash.
+Can I act as my own contractor?
Some lenders allow it with a qualified GC of record; many prefer a licensed builder.
Related
This website does not guarantee any mortgage rate, approval, or product. We do not provide mortgage advice on this website. All mortgage transactions are handled by the licensed brokerage identified on this site, in accordance with FSRA requirements.