Mortgage services · 13
Buying pre-construction: the financing questions that come later
Pre-construction is a different purchase than a resale home — you're buying today at a price that closes years from now. The financing conversation really has two parts: what you qualify for now, and what can change by the time you get the keys.
The gap that matters most
Your closing-day mortgage is based on the appraised value then, not your original contract price.
New builds and financing
First-time buyers and new-construction buyers both get access to easier insured terms.
New in 2026
A federal rebate can return up to $50,000 of GST on an eligible new build.
The basics
Why the appraisal matters more here than on a resale
With a resale home, you get an appraisal around the same time you get your mortgage — the numbers are close together in time. With pre-construction, you sign an agreement of purchase and sale years before closing, at a fixed price. When your mortgage is finally arranged near closing, the lender orders a fresh appraisal of what the unit or home is actually worth at that time.
In a rising market, that number is often at or above your contract price and this is a non-issue. In a flat or declining market, it can come in below what you agreed to pay — and your mortgage is sized against the lower of the two.
What this means for you
If the appraisal comes in under your purchase price, you don't automatically lose the deal, but you generally need to cover the difference yourself — a larger down payment, other savings, or in some cases lender- or transaction-specific financing that looks at the fuller picture of your file. What that looks like depends entirely on the lender, the size of the gap, your overall qualification, and how the purchase is structured. No one can promise in advance that a shortfall will be covered based on your original price — that's a lender-by-lender, deal-by-deal decision made close to closing, not a standing guarantee. What I can do is flag the possibility early, so it's a planned-for scenario instead of a surprise in the final weeks.
Two programs worth knowing before you sign
New builds get their own advantages
30-year insured amortization. If the home is newly built, you may qualify for a 30-year amortization on an insured mortgage — lowering the monthly payment compared to the standard 25-year schedule — whether or not you're a first-time buyer. First-time buyers of any home, new or resale, also qualify.
The First-Time Home Buyers' GST/HST Rebate. A federal program, in effect since March 2025 and now processing claims through the CRA, can return up to $50,000 of the GST paid on an eligible new or substantially renovated home, for buyers who meet the first-time buyer test. It stacks with the FHSA, the RRSP Home Buyers' Plan, and Ontario's land transfer tax rebates — see the First-Time Home Buyer page for how those fit together. Eligibility has specific conditions around the purchase agreement date and your buyer history — worth confirming against your exact contract before you count on it.
Between signing and closing
What tends to change over a multi-year build
- Your own qualification. Income, credit, and debts can all shift over a two-, three-, or four-year build. The lender requalifies you close to closing, not against your file from the day you signed.
- Deposit structure. Pre-construction deposits are usually staged over the build, separate from your eventual mortgage down payment — worth mapping out early so the timing doesn't surprise you.
- Interim occupancy. Condos in particular often have an occupancy period before the building is legally registered, sometimes with separate monthly costs before your mortgage even starts. If this applies to your purchase, it belongs in the planning conversation.
The earlier we talk — ideally before you sign the agreement, but any time before your final closing helps — the more of this we can plan for instead of react to.
Common questions
Questions people ask
Short answers in plain English. Your situation may be different — ask me anything on a free call.
Can you guarantee my mortgage will match my original purchase price?
No, and any professional who tells you otherwise before seeing the closing-day appraisal isn't giving you the full picture. What I can do is help you understand the risk upfront, structure your file to be as strong as possible by closing, and know which lenders tend to be more flexible when a gap does appear.
Do I need to re-qualify before closing?
Yes. Your pre-approval from years earlier isn't the final word — the lender confirms your income, credit, and the property's value close to your actual closing date.
What if I want to sell my contract before closing instead?
That's an assignment sale — selling your rights to the purchase agreement to another buyer before it closes. It's a distinct process with its own tax and builder-approval considerations, worth its own conversation if it's what you're considering.
Does the 30-year amortization or the GST rebate apply to every new build?
Both have specific eligibility conditions tied to your buyer history and the purchase agreement details. I check both against your actual contract rather than assuming either applies.
Buying pre-construction?
Send me the agreement of purchase and sale and your expected closing date. I'll tell you honestly what to plan for between now and keys — including the parts builders don't bring up.