Products

Construction mortgage

A mortgage that funds the build of a new home in stages (draws), tied to inspection milestones. Converts to a standard mortgage on completion. Higher rates during the construction phase.

Instead of one lump sum, a construction mortgage releases money in draws as the build hits milestones — foundation, lock-up, drywall, completion — each confirmed by an inspection or appraisal. You typically pay interest only on the funds drawn so far during the build.

Lenders want the full picture up front: fixed-price builder contract, permits, plans, and budget, plus contingency for overruns. Draw timing and holdbacks (lien-act holdbacks) can squeeze cash flow, so coordinating the schedule with your builder is critical.

On completion the construction loan converts to a standard mortgage at regular rates. It's distinct from purchase-plus-improvements, which finances renovations on an existing home rather than a ground-up build.

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A lender

A bank or monoline that prices its lowest rates and tightest underwriting against borrowers who fit prime credit, income, and property criteria. The big banks (RBC, TD, Scotia, BMO, CIBC, NB) and major monolines (MCAP, First National, MERIX) are A lenders.

B lender

An alternative ("alt-A") lender that prices higher than A lenders but flexes on credit history, income documentation, property condition, or self-employed earnings. Examples include the alternative-lending programs of Equitable Bank and Home Trust.

Bridge financing

Short-term loan that lets you close on a new home before the sale of your existing one funds. Priced at prime + premium, secured against both properties, typically up to 90-120 days.

Closed mortgage

A mortgage that limits how much extra you can prepay each year and charges a penalty if you break the term early. Almost all standard Canadian mortgages are closed because the rates are materially lower than open.

Collateral charge mortgage

A mortgage registered against your property for more than the actual loan amount, letting you increase the limit later without re-registering. Common at TD and Scotia. Makes inter-lender switches harder mid-term.

Conventional mortgage

A mortgage with at least 20% down. No mortgage default insurance required. Pricing is typically higher than insured because the lender carries more of the credit risk.

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