Pre-Construction

Bought a pre-construction home? Lock your rate before you move in.

Lock today's rate for 120 days now. We re-check the market monthly all the way to your move-in date — and we handle both the interim occupancy mortgage (when you move in) and the final closing mortgage (when the building registers).

120-day rate lockRe-shop monthlyInterim occupancyFinal closingAssignments OKBuilder warranty aware

5-star rated| FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by the Principal Broker, FSRA #13737 · Updated June 2026

Bought a pre-construction condo?

From deposit to keys — we handle every step.

We arrange your interim occupancy mortgage (when you move in) and your final closing mortgage (when the building registers), so there are no surprises.

Interim occupancy countdown

year

months

days

Deposit20% staged

Interim occupancy feeinterest-only

Final closingwe re-shop at occupancy

Get pre-approved Affordability

Maya · AI · 24/7

Pre-construction — do I get my rate now or at occupancy?

5-star rated| FSRA #13737| 50+ langs

Pre-construction is a multi-step financing journey. Initial deposits, milestone deposits, occupancy, registration. Most buyers wait too long to engage a broker — we recommend starting 18 months before occupancy.

What you get

Why Canadians choose Mortgage Squad Advisors.

Pre-approval as soon as you have an APS

120-day rate holds, refreshed as occupancy approaches

We track your build milestones and rate environment

Re-qualify if your situation changes (income, dependents, etc.)

Occupancy fee calculation and planning

Coordinating with builder's preferred lawyer (or our own)

Maya alerts you when rates drop ahead of occupancy

Assignment-friendly lenders (when permitted)

Maya · 24/7 AI advisor

Question about pre-construction mortgage? Maya answers instantly in 50+ languages.

Chat Call

How it works

Three simple steps, no pressure.

Engage Early

12-18 months out, send us your APS. We pre-qualify and start tracking.

Lock + Re-Shop

Lock 120-day rate holds. Each renewal of the hold, we re-shop the market.

Close at Occupancy

30-45 days before occupancy, we firm up the file and fund.

Run the math first

Does a builder require a mortgage pre-approval letter for pre-construction?

Yes — most builders and developers won’t let you firm up a pre-construction purchase without a mortgage pre-approval letter, and many ask for it within a few days of signing the Agreement of Purchase and Sale (it’s sometimes written into the agreement as a financing condition). The reason is simple: the builder is selling a home that won’t exist for 12–36 months, so they want evidence up front that you can actually close. A pre-approval letter from a licensed brokerage shows the developer you’ve been vetted — income, credit, and down payment reviewed — and that a lender is prepared to finance you. We turn these around fast: most clients get a builder-ready pre-approval letter within 24–72 hours of sending us their documents, tailored to exactly what your builder asks for. This letter isn’t your final mortgage — the binding financing is arranged near completion (see below) — but it’s the document that gets your offer accepted and your deposit secured. Already have an APS deadline? Start your pre-approval and we’ll prepare the letter your builder needs.

Why is financing a pre-construction home different from a resale purchase?

When you buy pre-construction, you sign an Agreement of Purchase and Sale years before the building actually exists. That timing changes everything about the mortgage. You cannot lock a mortgage rate that far out — no lender will guarantee pricing on a property that won’t complete for 18, 24, or 36 months. The real mortgage is arranged near your final closing, once the unit is registered and the lender can value a finished home. In the meantime, you commit deposits and wait. That gap is exactly where a broker earns their keep: we pre-qualify you the moment your APS firms up, attach a 120-day rate hold as occupancy approaches, and re-shop our 100+ lenders so your file is ready the day pricing can actually be guaranteed. Engaging early isn’t over-planning — it’s the only way to control a timeline you don’t set. See how we approach a true new-build draw on our construction mortgage page.

How do deposits work on a pre-construction condo or home?

Pre-construction deposits are staged, not paid all at once. A builder typically collects a total deposit of roughly 15–20% spread across several payments tied to their own schedule — for example, a sum on signing, more in 30, 90, 180, and 365 days, and sometimes a final tranche at occupancy. This is fundamentally different from a resale down payment, where you bring your full down payment to one closing. With pre-construction, your cash is committed gradually and locked in long before you fund a mortgage, so liquidity planning matters: the deposit money is tied up, and it doesn’t reduce your mortgage qualification the way a larger resale down payment might at application. We help you map the builder’s deposit calendar against your cash flow so you’re never scrambling for a tranche — and so the down payment that actually funds at final closing is structured to qualify you for the best pricing across our lender panel.

What is the interim occupancy period and why do I pay an occupancy fee?

For condos especially, there’s a gap between when you can move in (occupancy) and when the building is legally registered and your mortgage funds (final closing). During this interim period — which can run weeks or many months — you live in the unit but don’t yet own it on title, so you pay the builder an occupancy fee, sometimes called “phantom rent.” It generally combines three parts: interest on the unpaid purchase balance, an estimated property-tax component, and projected condo (maintenance) fees. Crucially, the occupancy fee is paid to the builder, not a lender, and it does not pay down your mortgage — your mortgage hasn’t funded yet. Buyers are routinely caught off guard by carrying this cost on top of their deposits. We calculate your likely occupancy fee in advance and build it into your budget so move-in doesn’t blow up your cash flow.

How is the mortgage approved at final closing, and what if the appraisal comes in low?

Your actual mortgage is approved close to completion, once the unit registers and a lender can appraise a finished home. That introduces real risk. Values and appraisals at closing matter: if you signed your APS years ago and the market has softened, the appraisal can come in below your contract price. Lenders fund against the lower of purchase price or appraised value, so a shortfall means you must cover the difference in cash on top of your deposits. Your own situation can shift too — income, employment, or credit may look different after a long build, and that affects approval. This is why we re-qualify your file as occupancy nears rather than assuming the original pre-approval still holds. With 100+ lenders, we can move a file that one lender’s appraisal sinks, and we plan for shortfalls early. If equity timing is tight, ask us about bridge financing options.

Is my deposit protected, and can I finance an assignment sale?

In Ontario, deposits and new-home warranty coverage run through Tarion under the HCRA (Home Construction Regulatory Authority), giving pre-construction buyers defined deposit protection and warranty rights on qualifying builds — worth confirming against your specific agreement. Assignment sales — selling your contract before final closing — are sometimes permitted, but only when the builder and the condo declaration allow it, and lenders underwrite assignments cautiously with extra documentation. Both situations reward careful planning, which is the broker advantage. As an FSRA-licensed brokerage (#13737) with 100+ lenders and service in 50+ languages, we coordinate the closing end to end: deposit and warranty questions, builder lawyer coordination, assignment-friendly lender selection, and a clear, fees-disclosed picture before you commit. If your plans shift to staying long-term, we can also map your path to a future mortgage refinance.

FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

Do I need a mortgage pre-approval letter to buy a pre-construction home?

Usually yes. Most builders require a pre-approval letter to firm up the deal — often within a few days of signing the APS, and sometimes written into the agreement as a financing condition. It proves to the developer you can close on a home that won't complete for years. We provide a builder-ready letter quickly so you don't lose the unit.

How fast can you provide the pre-approval letter my builder is asking for?

Most clients get a builder-ready pre-approval letter within 24–72 hours of submitting documents (ID, income, proof of down-payment funds). We tailor it to your specific builder's requirements and can rush it when a deadline is tight.

Does the pre-approval letter guarantee my mortgage at final closing?

No — it shows you qualify today and gets the builder comfortable, but the binding mortgage is arranged near completion, once the unit registers and can be appraised. We re-qualify and re-shop your file across 100+ lenders as occupancy approaches, so the letter you hand the builder is backed by a real plan to fund.

How early can I get a mortgage on pre-construction?

As soon as your firm APS is signed and your status changes from 'cooling-off period' to 'firm.' Many clients pre-qualify within a week of signing.

Will my rate hold last until occupancy?

120 days is the typical max rate hold. If occupancy is 18 months out, we re-do the hold every 90-120 days.

What if rates drop before occupancy?

We re-shop. Most lenders will give you the lower of (locked rate) or (current rate at funding) within their hold.

What if my income changes?

We re-qualify. If your story improves, great. If it worsens, we identify alternatives early — much better than at occupancy when you have no time.

What's an occupancy fee?

An interim payment paid to the builder (not your lender) between occupancy and registration. Equivalent to interest on the unpaid amount + property tax estimate + condo fees.

Can I assign my pre-construction unit?

Sometimes (depends on builder + governing condo declaration). Lenders treat assignments cautiously — we handle the documentation.

What if construction is delayed?

Common. Your rate hold extends if we have evidence of delay. Lenders are generally accommodating on builder-side delays.

Should I pre-construct in this market?

Depends on your timeline, market, and risk tolerance. We don't sell pre-construction — we just finance it for buyers who've decided. Maya can model carry costs if you want a sanity check.

Related products

Pre-construction vs resale Construction First-Time Buyer

Ready when you are.

No obligation and no credit check to start. Maya answers right away, and a licensed advisor steps in whenever you'd like.