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Renovation financing in Ontario
There are three sensible ways to pay for a renovation and none of them is a credit card. Which one fits depends on whether you are buying the property or already own it, and how the money needs to flow to your contractor.
Who this is for
- Buying a home that needs work before you move in
- Owners funding a kitchen, basement, roof or addition
- Adding a legal secondary suite
- Have quotes and want the cheapest way to fund them
What's included
Purchase plus improvements
Buy and renovate on one insured mortgage based on the improved value, with as little as 5% down on the combined amount.
Refinance takeout
For owners: pull equity up to 80% of current value and hold the funds before the work starts.
Draw and holdback guidance
Improvement funds are held by the lawyer and released on completion. We prepare you for that timing so contractors get paid on schedule.
Quote and scope review
We flag work lenders will not fund and which improvements actually support an increased valuation.
How purchase plus improvements works
You provide contractor quotes with the offer. The lender appraises the property as-improved, lends against that value, and holds the renovation portion with your lawyer. You complete the work, the lender verifies it, and the funds are released to reimburse you.
The key detail people miss: you or your contractor must cover the work up front, because the money is released after completion. We tell you this before you sign anything, not after.
Renovating a home you already own
If you have equity, a refinance to 80% of appraised value gives you the cash before the work starts, at mortgage rates. A home equity line of credit is more flexible for phased projects, at a slightly higher rate that floats with prime.
For a project under roughly $25,000 on a mortgage with a large penalty, the line of credit usually wins. Above that, or if you also want a better rate on the existing balance, the refinance usually wins. We run both.
Secondary suites and rental income
A legal second unit can add income a lender will count toward your qualification. The unit has to meet municipal requirements and be documented properly, so involve us and your municipality early rather than after the drywall goes up.
How the process works
- 1
Scope and quotes
Contractor quotes define the budget lenders will advance against.
- 2
Choose the structure
Purchase-plus-improvements, refinance takeout, or a line of credit — each suits a different project.
- 3
Approval with holdback
On improvement programs, funds are held by your lawyer and released once work is verified.
- 4
Release of funds
Post-renovation inspection or invoices submitted, then the advance is released.
Documents we'll ask for
- Written contractor quotes with a scope of work
- Current mortgage statement (refinance) or purchase agreement
- Property tax bill
- Income documents
- Photos of the areas being renovated, where available
Documents come in through secure upload — never plain email. Missing something? Send what you have and we'll tell you what still matters.
Run the numbers
Calculators for this file
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- Can I add renovation costs to my mortgage?
- Yes. On a purchase, a purchase-plus-improvements mortgage adds the cost based on contractor quotes and the improved value. As an owner, a refinance or equity line pulls the funds from your existing equity.
- How much can I add for improvements?
- Insurer programs generally allow improvements up to about 10% to 20% of the as-improved value, subject to lender limits. We confirm the ceiling for your specific file before you commit to quotes.
- Do I have to pay for the renovation up front?
- With purchase plus improvements, yes — funds are held and released once the work is verified. Plan the cash flow with your contractor, or use a refinance instead if you need money in hand first.
Find out what you actually qualify for
Send the basics and we'll come back with real lender options, or call and get an answer on the first conversation.