Construction Mortgages

Get a tailored mortgage to match your custom dream home. Start the mortgage process with Affinity early in the planning phase of building your home and get ready to begin construction.

Mortgage Calculator

What is a construction mortgage?

A construction mortgage finances the construction of a new home. It acts as a way to manage your cash flow and disburse funds as your build progresses.

Affinity construction mortgage benefits:

Save time and money from one mortgage application and one mortgage closing at the end of home construction
Opportunity to lock-in interest rates at the start of construction
Great rates and pricing options. Check out our Special Offer rates!
Flexible down payment options – qualify with as little as 5% down
Flexible withdrawal and repayment terms
Interest-only payments during your home’s 12-month construction phase
Opportunity to switch to blended payments for your post-construction mortgage

What does a construction loan include?

Land purchases:

A construction loan includes an initial payment to purchase land.
If you already have a loan on a property, the first disbursement can reimburse funds up to a certain percentage (based on land type).

Eligibility:

Primary residences, vacation homes and residential rentals are all eligible.
If your new home construction is financed by a developer or homebuilder, you don’t need a construction loan.

Types of products

Contractor build

To qualify: Own the land prior to construction and you have a contract with a homebuilder to construct the unit.

How it works: Advances are made to the homeowner who then pays the homebuilder in installments.

Self-build

To qualify: The property is registered in your name and you will own and occupy the home when construction is complete. You do the work, or contract with one or more subcontractors, to build or renovate the property.

How it works: Advances are made to the homeowner.

RTM build

To qualify: The Ready to Move (RTM) builder must be reputable and well-established, and known to Affinity.

How it works: Affinity provides options specific to RTM builds.

Leased land

To qualify: A review of your lease agreement is required to ensure construction adheres the terms set out in the lease agreement.

How it works: Advances can deviate from standard construction schedules and calculations normally set out by a construction mortgage

Construction on spec

To qualify: Homes constructed for speculation purposes (less than four units) are administered as a commercial mortgage.

How it works: While constructing on spec, you will be charged an appropriate application fee and not be eligible for a refund.

Affinity Credit Union must assess the knowledge, skills and abilities of the borrower to manage new home construction and the extent to which this may pose a risk to the Credit Union in the timely and on-budget completion of the build.

Ready to talk more?

Call 1.866.863.6237 to book an appointment and for details on products and special pricing.

Estimate how much you can afford and start your pre-approval today.

Mortgage Calculator

Do you need to buy land to build your dream house or RTM?

Speak with an Affinity Advisor first to discuss your options.

Looking to learn more? Find it here:

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Are there any fees?

An application fee could be applied in some case depending on the mortgage rate selected. Your advisor will explain if this applies in your situation.
What is an advance?

An advance is when funds are released to the mortgage holder once a construction milestone had been completed, inspected, and signed off on.
Do I need a Line of Credit?

A Construction Mortgage releases funds once an inspection milestone is complete, but during construction, funds are often required upfront for building materials. To make the process easier, set up a Line of Credit with Affinity to meet your needs and reduce your cash flow strain.
What are the steps to getting a Construction Mortgage?
- Qualifying for a mortgage amount
- Signing an agreement with your homebuilder
- Collecting detailed estimates for all building costs
- Establishing construction start and end dates, as well as a disbursement and progress advance schedule
- Acquiring a blueprint appraisal
- For RTM builds: collecting all quotes, and shipping costs
What costs can be included in a Construction Mortgage?

Arranging a Construction Mortgage, managing your home construction costs, hiring a general contractor and constructing your home are all eligible costs.
What is not included?

Building permits, blueprints, appraisals and demolition of an existing house are not included.
How do progress advances and disbursements work?

Your homebuilder can require installment payments during the build. Typically, mortgage disbursements occur in four phases with key milestones to meet over the 12 months of construction. Funds are released after the build has passed inspection.
Inspection 1 – foundation
Inspection 2 – framing, electrical, plumbing and heating
Inspection 3 - insulation and vapour barrier (no drywall)
Inspection 4 – completion of the build
What are my insurance requirements?
- During home construction, builder’s blanket insurance is required.
- For an RTM build, insurance during the move is required with loss payable to Affinity Credit Union.
- For all builds, fire insurance is required with loss payable to Affinity Credit Union.
- For an insured mortgage, follow requirements for Sagen or CMHC
- For a conventional mortgage, a New Home Warranty is available for all projects, other than self-builds
When do I sell my current home?

You may plan to use the proceeds from your current home’s sale to help finance your new home construction. An Affinity Mortgage Specialist can help you choose the best option.
Option 1 Wait to sell – If you wait to sell, you'll have to qualify for a new construction loan while still making payments on your existing mortgage. If you already own the property you're building on, it can be used as equity for your new construction loan.
Option 2 Sell now and rent – Selling your current home before construction begins and living in a rental (or other housing alternative) until your new home is complete is another option. This way, the equity in your current home is available right away for your new build and you'll only have the construction loan outstanding.

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