From ground break to completion.
Construction financing requires draw schedules, cost-to-complete analysis, and lender relationships most brokers don't have.
From a single custom build to a multi-unit development.
New home construction — custom, owner-builder, spec, and 2–4 unit builds.
Townhouse, condo & purpose-built rental construction.
Financing for land purchase ahead of development.
Major renovation and property conversion financing.
Transition from construction to permanent mortgage.
When institutional construction financing won't work.
Which construction lender is right for your project?
Four capital lanes, four very different cost-of-capital, leverage and underwriting profiles. We size the project against all four before you sign a builder contract.
Cheapest capital. Needs a fixed-price contract, a BC Housing-registered builder, and home-warranty coverage. At completion you can stay open (~18 months) or lock into a 3–5 year term.
Lowest cost of capital in Canada for rental construction. 9–12 month commitment runway — start early.
Used when timing, asset, or borrower doesn't fit a bank. Refinanced or paid out at completion.
The bridge from assembly to build: we line up the construction take-out early so the land loan pays out cleanly at shovel-ready.
The five-stage construction draw schedule.
BC and Alberta institutional construction mortgages typically release funds across five inspected milestones. Each draw is appraiser-verified and subject to a 10% builders-lien holdback.
Excavation, footings, foundation complete and backfilled. Appraiser confirms slab/foundation pour.
Framing, roof, windows, and exterior doors installed. Building is weather-tight.
Rough mechanical (plumbing, HVAC, electrical) inspected and approved; insulation and drywall complete.
Cabinets, flooring, fixtures, trim, paint. Mechanical and electrical finished and tested.
Final occupancy permit, take-out mortgage funds, and holdback release once the provincial lien period ends — 55 days after completion in BC, 60 days in Alberta.
What most brokers get wrong about construction.
Construction is the least forgiving lane in mortgage lending — the loan is approved once, but it has to keep working at every draw. These are the mistakes we see on files that arrive broken.
Each draw is released only after an inspection confirms the work is in place — which means you front the costs of every stage before the lender reimburses it. A broker who doesn't map that cash-flow gap against your contingency leaves you squeezing trades mid-build.
The 10% builders-lien holdback isn't released at occupancy — it waits out the provincial lien period (see the BC-vs-Alberta breakdown below). Files that don't build those extra weeks into the take-out timing come up short at exactly the wrong moment.
The construction loan is the bridge; the take-out mortgage is the destination. We arrange the exit before the first shovel — otherwise you're negotiating your permanent financing from the weakest possible position: a half-built house and a maturing loan.
Every construction lender has a sharply different appetite — owner-builders, spec builds, rural land, cost overruns — and those appetites shift with the market. Knowing which desk funds which project this quarter, and how fast each one actually releases draws, is the difference between a build that flows and one that stalls. That knowledge only comes from placing these files constantly.
BC and Alberta hold back differently.
Both provinces require a 10% statutory holdback on construction payments, but the lien deadlines and their triggers differ — and they set the timing for your final draw and take-out. Here's the statute for each, kept separate from lender policy.
- 10% holdback retained on each payment (s. 4).
- Lien filing — 45 days. If a certificate of completion was issued for the contract, the 45 days runs from that date. A certificate is only issued on request, so most single-contract homes never have one — then the 45 days runs from when the head contract (or the improvement) is completed, abandoned or terminated.
- Holdback released 55 days after completion, once the lien period passes with no claim filed (s. 8).
- 10% holdback (major lien fund) retained (s. 18).
- Lien registration — 60 days (raised from 45 when the PPCLA took effect August 29, 2022). It runs from a claimant's last day of work or materials; for the prime contractor, from the certificate of substantial performance or completion.
- 90 days for concrete, and for oil-or-gas wells and well sites.
- Holdback retained 60 days after the certificate of substantial performance (or completion if none). A separate prompt-payment rule requires a proper invoice to be paid within 28 days.
General information, reviewed July 2026 — not legal advice. Construction-lien deadlines are strict and fact-specific; confirm the requirements for your project with construction counsel or your lawyer before relying on any date. Program rates, leverage and timelines are illustrative and change with the market and each lender.
Common construction-financing questions.
What is a construction mortgage in BC?+
A construction mortgage (also called a draw mortgage or progress-advance mortgage) funds a new build in stages instead of one lump sum. The lender advances money at pre-defined construction milestones — typically foundation, lock-up, drywall, finishing, and completion — and you pay interest only on funds drawn. At completion the construction loan converts to (or is refinanced by) a permanent mortgage.
How much do I need to put down on a construction loan in BC?+
Most institutional construction lenders in BC want 25–35% equity in the project — either cash, land equity, or a combination. Owner-builders and spec builds are usually capped at 65% loan-to-cost. CMHC MLI Select multi-family construction can go as high as 95% loan-to-cost. Private construction lenders can sometimes cover 100% of hard costs if you bring the land free-and-clear.
What's the difference between a construction loan and a construction mortgage?+
In Canada the terms are used interchangeably. Both describe a draw-based facility that funds vertical construction. A 'construction mortgage' is registered against title from day one and converts to a permanent mortgage at completion. A 'construction loan' may be a short-term unregistered facility that gets refinanced into a separate take-out mortgage. Most BC banks and credit unions structure their product as a true construction mortgage — one registration, one closing.
Can owner-builders get a construction mortgage in BC?+
Yes — but you'll need to obtain an Owner Builder Authorization from BC Housing under the Homeowner Protection Act before construction begins, carry course-of-construction (builder's risk) insurance, and meet stricter draw oversight. Loan-to-cost is typically 5–10% lower than a builder-built equivalent, and many banks decline owner-builder files entirely. Credit unions and a handful of mono-lines are the usual home. Private capital fills the rest.
How long does construction financing take to arrange?+
Plan on 30–60 days for a conventional residential construction mortgage, 60–90 days for private construction debt with land already owned, and 9–12 months for a CMHC MLI Select commitment on a multi-family project. The build itself sets the term — usually 9–18 months residential, 18–30 months multi-family.
What is a draw schedule and who controls it?+
A draw schedule is the pre-agreed payment plan tied to construction progress (foundation → lock-up → drywall → finishing → completion). An independent appraiser or quantity surveyor inspects each stage and signs off before the lender releases funds. The lawyer also holds back 10% of each draw under provincial builders-lien rules until the lien period closes — the timeline differs between BC and Alberta (see the holdback question below).
How does the builders-lien holdback differ between BC and Alberta?+
Both provinces require a 10% statutory holdback, but the lien timelines differ. In BC (Builders Lien Act), a claim of lien must be filed within 45 days — running from a certificate of completion if one was issued for the contract, or otherwise from when the head contract or improvement is completed, abandoned or terminated — and the holdback is released 55 days after completion. In Alberta (Prompt Payment and Construction Lien Act, in force 2022), the general lien-registration period is 60 days (90 days for concrete, and for oil-or-gas wells and well sites), and the 10% holdback is retained for 60 days after the certificate of substantial performance or completion. Build the extra days into your take-out timing. See the BC-vs-Alberta breakdown above, and confirm the specifics for your project with construction counsel.
Does CMHC insure construction financing?+
Yes — through MLI Select, CMHC's commercial multi-family program. It covers 5+ unit purpose-built rental construction with up to 95% loan-to-cost, 50-year amortization on the take-out, and the lowest commercial spreads in Canada — in exchange for affordability, energy-efficiency, or accessibility commitments. CMHC's multi-unit construction programs (like MLI Select) are for 5+ unit rental only — but CMHC homeowner default insurance can still be used on a new single-family build, funded through progress (draw) advances, where a recognized new-home warranty is in place.
When does a private construction loan make sense?+
Private construction capital is the right tool when (1) the land isn't yet entitled or shovel-ready, (2) the sponsor doesn't fit bank covenants, (3) timing is faster than a bank can close, or (4) an existing construction loan has a cost overrun and needs a rescue. Pricing is typically 9–13% plus a 1–3% placement fee, with the interest reserve capitalized into the loan.
How much of my project will a construction lender finance?+
Institutional construction lenders typically advance up to 75% of your total project cost — calculated as the lower of the land's appraised value or purchase price, plus construction costs — and require a 10% contingency built into the budget. The first advance covers up to 75% of the land value; the rest is released in progress draws as the build passes inspected milestones, and you pay interest only on the funds actually advanced (often around Prime + 2% during construction).
Can rental or suite income help me qualify for a construction mortgage?+
Often, yes. If your plans include a legal suite, many BC lenders will use up to 90% of its projected market rent to help you qualify. On a home with, say, a laneway or coach home plus a basement suite, the combined market rent can be offset at 90% against your qualifying payment — which can meaningfully increase how much you're approved for.
What happens to my construction mortgage when the build is finished?+
At completion it converts to a permanent mortgage. You can stay on a short open term (around 18 months) at the construction rate, or lock into a 3–5 year term — either passing the stress test for the best rate, or skipping the stress test for a small rate premium (often about 0.20% higher). We map the exit before you break ground so there are no surprises at occupancy.
Financing a build? Have these ready.
A complete package gets a construction commitment weeks faster and keeps your draws flowing. Gather what you can — we'll tell you exactly what your lane and lender need.
- Detailed project budget — hard costs, soft costs, and contingency
- Fixed-price construction contract or a signed builder cost estimate
- Architectural drawings, site plan, and the building permit (or permit status)
- Land title, purchase contract, and proof of your land / cash equity
- Builder résumé and track record — plus BC Housing / HPO registration for owner-builders
- Course-of-construction and liability insurance
- 'As-complete' appraisal and comparables (we can order)
- Pro forma, rent roll, and zoning confirmation for multi-unit / rental projects
- Personal net-worth statement, T1s/NOAs, and T2s/financials for corporate borrowers
We work with developers, builders, and individual clients to structure financing that moves with the project — from land acquisition through to completion and take-out financing.
Both institutional and private construction lenders across BC and Alberta — conventional, CMHC, and private depending on the project and borrower profile.
Start a Secure Mortgage Application →Run the numbers with our commercial & construction payment calculator, or see how we structure real files on our case studies page.