First-Time Buyer Mortgage Planning Guide › Chapter 9
I love the house, but it needs work.
By Rajiv Verma, Mortgage Broker · Mortgage Architects, FSRA Brokerage Licence #12728 · Updated November 3, 2026
Short answer: Purchase Plus Improvements lets you add the cost of renovations to your mortgage when you buy. The catch: the renovation money is released after the work is done, not at closing, so you need a way to pay the contractor first.
How does it work?
- Get written quotes for the work before you finalize your mortgage.
- The lender approves the mortgage on the purchase price plus improvements, if the appraisal supports the value after the work.
- At closing, the lawyer holds back the improvement money.
- You complete the work within the lender’s deadline, usually 90 to 120 days, sometimes longer.
- Once the work is verified (invoices, photos or an inspection), the lawyer releases the money.
What does it look like in real numbers?
| Without improvements | With Purchase Plus Improvements | |
|---|---|---|
| Value the mortgage is based on | $700,000 | $730,000 |
| Minimum down payment | $45,000 | $48,000 |
| Kitchen paid for by | Savings or a credit card later | Your mortgage |
For about $3,000 more down, the $30,000 kitchen is spread over your mortgage instead of a high-interest card.
Nobody told me this
The renovation money comes after the work is finished. Plan to pay your contractor upfront from your own funds and get reimbursed, or find a contractor willing to wait.
What else should I know?
- The work must add value: kitchens, bathrooms, flooring, roofs, windows. Furniture and appliances don’t count.
- Your down payment is based on the full amount, not just the purchase price.
- The total must stay under the $1.5 million insured limit.
- Get real quotes before your financing deadline.
- The insurance premium is calculated on the larger mortgage, and lenders and insurers cap how much improvement money they’ll add.
Frequently asked questions
Can I use Purchase Plus Improvements with less than 20% down?
Yes. All three insurers offer a version of it.
When do I get the renovation money?
After the work is done and verified, through your lawyer.
Can I buy appliances with it?
No. Furniture and appliances don’t count as improvements.
CMHC Improvement program → · Sagen Purchase Plus Improvements →
Next up · Chapter 10I’m buying from a builder.Continue reading →
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Rajiv Verma, Mortgage Broker · Mortgage Architects, FSRA Brokerage Licence #12728 · 15 Gateway Blvd, Unit 201, Brampton, Ontario · Office 289.505.0631 · Direct 647.291.7116
This guide is general education, not personal financial, legal or tax advice. Rates shown are examples as of November 3, 2026, for comparison only, and are not a quote or a commitment to lend. Your rate and approval depend on your application, credit, income, property and lender guidelines. Program rules can change.