There are really 2 ways to make construction financing come together for a new home purchase.  A completion mortgage and a draw mortgage.  If you’re purchasing a new home, your builder will likely have requirements for what type of mortgage they expect you to have.

Completion Mortgages

Many production builders, like Streetside DevelopmentsShane Homes, , Homes by Avi or others, will expect you to have a “Completion Mortgage.”  This means that you FINANCING IN CALGARY provide your 5% down payment funds at the time that you write the offer and then the rest of the funds at closing. 

If you’re purchasing a new build, rental property, the builder may require that you put 20% down payment down at the time of the offer and the rest at “closing.”  In this context, closing means the date that you actually get the keys to your new home.  

Here is how completion mortgages work:  

  1. You walk into a show home with your REALTOR® and decide “this it the one!”  

  2. Next, you’re required to write an offer, (yes, you don’t have to just take the price they give you), and provide a small, good faith deposit, typically about $1,000 to $5,000 to hold the lot. 

  3. There could be some back and forth between you and the builder, but once you’ve settled on a price, the builder will sign the purchase contract and then you typically have 2 weeks to secure your financing. 

  4. During the 2 weeks, you work with your mortgage broker to make sure the remaining funds will be available on your “closing date,” (the day you get the keys to your new home). 

  5. Once the mortgage has been settled and you’re sure you want to proceed, you waive your conditions with the builder and you’ve got a firm deal.  At this time, you will be required to provide the remaining 5% down payment to the builder. 

** Important to know: some builders will allow a payment schedule over a few months to provide them with the full 5% down payment.  If this is something that you’re going to need, make sure to let your realtor know from the outset so that they can direct you towards builders with the most flexible payment options. **

What is a draw mortgage?

If you’re building a very custom home or working with a smaller builder, there is a good chance the builder will require a “draw mortgage.”  This is a mortgage that funds in 4 or 5 stages as the home is completed.  

Here is how draw mortgages work:  

  1. You work with your architect, builder and REALTOR® to purchase your desired lot and construct a plan to build your dream home.  

  2. In some cases, you might purchase the lot ahead of time, in others you might purchase the lot and home together.  Every scenario is different!

  3. Your mortgage broker works with the full package of information, the plans, the estimates, the builders timeline and your desired products and rates and constructs a plan that will work with the lender.  

  4. You are required to provide all of your down payment funds at the beginning of the mortgage.  The best way to think of it is that “your money goes into the deal first.”  

  5. As each stage of completion is reached, the lender sends an inspector, and they fund the next stage of the mortgage if the work is completed.

    • Stage one: Foundation complete

    • Stage two: Lock up

    • Stage three: Plumbing and wiring complete

    • Stage four: Interior finishing - about 85% complete

    • Stage five: Occupancy! 

**To Note: not all lenders provide draw mortgages.  When you’re considering a draw mortgage, it is strongly advised to consider a variable rate.  This gives you maximum flexibility to switch your mortgage to another lender after all of the draws are completed.**

Overall, whether you’re working with a draw mortgage or a completion mortgage, it’s important to work with a mortgage broker that specializes in this type of transaction.  You want to understand if your rate is held for the entirety of the building process, you want to understand what happens if there is a delay in the building process or if something unexpected happens with your employment or credit, and what options you have may or may not have.  Lean on your Real Estate team and ask all the questions you need as you navigate your new build.

Looking for construction mortgage providers in Calgary? Use our form below to be put in contact with one of our impact mortgage partners who are experienced with construction mortgage (completion and draw). 

Construction financing mortgage brokers in Calgary

Shout out to our talented mortgage partners (who offer some of the best options and advice for our clients) at the Spire Mortgage team for helping us out with this blog! If you have any questions about mortgages, construction financing, or more, please fill out the form below or reach out to the Spire mortgage team directly. Spire mortgages

You can also reach out to Spire mortgage directly by calling

Renee Huse 

(403) 804-5465

Contact Information

Provide a valid email address.

Mailing Address

Credit Information

Newsletter consent

Calgary New Construction

Sort by:
New
3012 Hampton Crescent Sw, Calgary

$1,449,800

3012 Hampton Crescent Sw, Calgary

4 Beds 4 Baths 1,926 SqFt Residential MLS® # A1147918

RE/MAX LANDAN REAL ESTATE

New
130, 12318 Barlow Trail Ne, Calgary

$625,000

130, 12318 Barlow Trail Ne, Calgary

0 Beds 0 Baths 0 SqFt Commercial MLS® # A1147423

CIR REALTY

New
1713 Westmount Road Nw, Calgary

$1,295,000

1713 Westmount Road Nw, Calgary

1 Bed 1 Bath 2,730 SqFt Residential MLS® # A1140447

RE/MAX COMPLETE REALTY

New
206 Livingston Common Ne, Calgary

$269,202

206 Livingston Common Ne, Calgary

2 Beds 1 Bath 878 SqFt Residential MLS® # A1147794

CHARLES

New
77 Legacy Glen Place Se, Calgary

$453,045

77 Legacy Glen Place Se, Calgary

3 Beds 3 Baths 1,508 SqFt Residential MLS® # A1147480

EXP REALTY

New
2205 29 Avenue Sw, Calgary

$1,350,000

2205 29 Avenue Sw, Calgary

4 Beds 4 Baths 2,365 SqFt Residential MLS® # A1147264

RE/MAX REAL ESTATE (CENTRAL)

New
613, 1020 9 Avenue Se, Calgary

$369,900

613, 1020 9 Avenue Se, Calgary

2 Beds 2 Baths 843 SqFt Residential MLS® # A1147640

BUSS REALTY LTD.

New
4627 B 72 Street Nw, Calgary

$699,999

4627 B 72 Street Nw, Calgary

5 Beds 4 Baths 1,883 SqFt Residential MLS® # A1143545

RE/MAX HOUSE OF REAL ESTATE

New
73 Shawnee Green Sw, Calgary

$689,900

73 Shawnee Green Sw, Calgary

3 Beds 3 Baths 2,003 SqFt Residential MLS® # A1147093

RE/MAX LANDAN REAL ESTATE

New
59 Mahogany Cape Se, Calgary

$824,900

59 Mahogany Cape Se, Calgary

3 Beds 3 Baths 2,411 SqFt Residential MLS® # A1140381

MAXWELL CANYON CREEK

New
1106 Bellevue Avenue Se, Calgary

$1,590,000

1106 Bellevue Avenue Se, Calgary

3 Beds 4 Baths 2,328 SqFt Residential MLS® # A1147306

DIAMOND REALTY & ASSOCIATES LTD.

New
2309 16a Street Sw, Calgary

$1,150,000

2309 16a Street Sw, Calgary

4 Beds 5 Baths 707 SqFt Residential MLS® # A1147211

CIR REALTY

New
116, 30 Mahogany Mews Se, Calgary

$319,900

116, 30 Mahogany Mews Se, Calgary

2 Beds 2 Baths 900 SqFt Residential MLS® # A1146813

EXP REALTY

New
125, 12318 Barlow Trail Ne, Calgary

$625,000

125, 12318 Barlow Trail Ne, Calgary

0 Beds 0 Baths 0 SqFt Commercial MLS® # A1147357

CIR REALTY

New
79 Red Sky Crescent Ne, Calgary

$610,000

79 Red Sky Crescent Ne, Calgary

4 Beds 3 Baths 1,911 SqFt Residential MLS® # A1147111

THE REAL ESTATE COMPANY

New
85 Legacy Glen Place Se, Calgary

$468,593

85 Legacy Glen Place Se, Calgary

4 Beds 3 Baths 1,753 SqFt Residential MLS® # A1146626

EXP REALTY

New
147 Creekstone Way Sw, Calgary

$449,900

147 Creekstone Way Sw, Calgary

3 Beds 3 Baths 1,521 SqFt Residential MLS® # A1146546

EXP REALTY

New
2633 34 Street Sw, Calgary

$899,900

2633 34 Street Sw, Calgary

4 Beds 4 Baths 1,801 SqFt Residential MLS® # A1146981

CIR REALTY

New
33 Nolanhurst Crescent, Calgary

$718,800

33 Nolanhurst Crescent, Calgary

4 Beds 2 Baths 2,566 SqFt Residential MLS® # A1146584

CENTURY 21 BAMBER REALTY LTD.

New
4077 32 Avenue Nw, Calgary

$590,149

4077 32 Avenue Nw, Calgary

2 Beds 3 Baths 1,538 SqFt Residential MLS® # A1146589

EXP REALTY

Posted by Calgary Homes Real Estate Partners Team on
Email Send a link to post via Email

Leave A Comment

e.g. yourwebsitename.com
Please note that your email address is kept private upon posting.