Renovation Mortgages
Finance your dream home renovation
Transform your house into your dream home with renovation financing that combines your mortgage with improvement costs. Lenderoo shops 40+ lenders and matches you with a top mortgage professional for lower rates than personal loans, a single payment, and guidance throughout - free, and on your side.
What is a Renovation Mortgage?
A renovation mortgage allows you to finance both the purchase or refinance of your home and the cost of renovations in a single mortgage. This powerful financing tool combines your home loan with improvement costs, giving you access to lower interest rates than traditional renovation financing options.
Benefits Over Personal Loans
- Lower interest rates (mortgage rates vs. personal loan rates)
- Longer amortization periods mean lower monthly payments
- Single monthly payment instead of multiple loan payments
- Potential tax benefits on mortgage interest
Types of Renovation Mortgages
Choose the renovation financing option that best fits your situation
- Project timelines
- Materials specifications
Work with qualified professionals who provide:
- Valid business licenses
- Liability insurance coverage
- Workers compensation insurance
- Verifiable references
Professional assessment determines:
- Current property value
- As-improved value after renovations
- Market comparables
- Renovation feasibility
Financial requirements vary by program:
- Minimum 5% down (CMHC insured)
- 20% down (conventional)
- 20% equity (refinance)
- Good credit score (typically 650+)
Timeline Considerations
Renovations must be completed within a specific timeframe (typically 6-12 months). Plan your project timeline carefully and ensure contractors can meet deadlines. Funds are released in stages as work progresses and passes inspection.
CMHC Purchase Plus Improvements
Canada's most popular renovation mortgage program
The CMHC Purchase Plus Improvements program allows you to buy a home and finance immediate renovations with as little as 5% down. This government-backed program is perfect for first-time homebuyers looking to purchase a fixer-upper at below-market value.
Program Highlights
- Minimum down payment of just 5%
- Up to $40,000 in renovation costs included
- Renovations must add lasting value to the property
- Work must be completed within 6 months of closing
- CMHC mortgage insurance protects your lender
- Available for primary residences only
Cost Comparison: Renovation Financing Options
See how much you can save with a renovation mortgage
| Financing Option | Interest Rate | Loan Amount | Monthly Payment | Total Interest (5 years) |
|---|---|---|---|---|
Renovation Mortgage | 5.5% | $50,000 | $301 | $8,060 |
| HELOC | 7.2% | $50,000 | $990 | $9,400 |
| Personal Loan | 12.5% | $50,000 | $1,112 | $16,720 |
| Credit Card | 19.9% | $50,000 | $1,250 | $25,000+ |
*Rates and payments shown are examples for illustration purposes. Actual rates vary based on creditworthiness and market conditions.
Real Results: The Johnson Family
The Challenge
The Johnson family found their dream location in Toronto, but the house needed significant updates. The kitchen was outdated, the basement was unfinished, and the bathrooms hadn't been renovated in 30 years.
Traditional financing would have meant depleting their savings or taking high-interest personal loans totaling over $80,000.
The Solution
We helped them secure a Purchase Plus Improvements mortgage, combining their home purchase with $75,000 in renovation costs at mortgage rates.
The Results
Popular Renovation Projects & Their ROI
Smart investments that increase your home's value
A modern kitchen is the heart of the home and one of the best investments you can make.
Adding or modernizing bathrooms significantly increases property appeal and value.
Converting unfinished basements into living space adds substantial square footage.
New windows, insulation, and HVAC systems reduce costs and appeal to eco-conscious buyers.
Outdoor living spaces are highly desirable and increase usable square footage.
A new roof provides peace of mind and is often a requirement for home sales.
Questions & Answers
Frequently Asked Questions
Answers to the most common questions about renovation mortgages and CMHC Purchase Plus Improvements financing in Canada.
Eligible Renovations
A wide range of home improvements qualify for renovation mortgage financing
Kitchen Renovations
Bathroom Upgrades
Basement Finishing
Additions & Extensions
Roof Replacement
Energy Efficiency
Accessibility Modifications
Structural Repairs
HVAC Upgrades
Windows & Doors
Why Choose a Renovation Mortgage?
Smart financing for your home improvement projects
Lower Interest Rates
Enjoy mortgage rates instead of high-interest personal loans or credit cards
Single Monthly Payment
Simplify your finances with one payment covering both mortgage and renovations
Increase Home Value
Strategic renovations can significantly boost your property's market value
Preserve Your Savings
No need to deplete your emergency fund or investment accounts
Flexible Timeline
Complete renovations at your own pace with staged fund releases
Professional Guidance
Expert support throughout the planning, approval, and renovation process
How It Works
Your journey to a renovated home in 6 simple steps
Get Pre-Approved
Meet with our mortgage specialists to determine your budget and get pre-approved for a renovation mortgage. We'll review your finances and renovation plans.
Find Your Property
Search for a property that needs renovations (for purchase) or assess your current home's renovation needs. Consider the potential value after improvements.
Get Renovation Quotes
Obtain detailed quotes from licensed contractors for your planned renovations. Include scope of work, materials, timelines, and costs for lender approval.
Lender Appraisal
The lender orders an appraisal to determine the property's value after renovations are complete. This "as-improved" value determines your loan amount.
Funds Held in Trust
Renovation funds are held in trust and released as work progresses. Your lender inspects completed work before releasing each payment to contractors.
Complete & Enjoy
Once renovations are complete and final inspections pass, enjoy your beautifully upgraded home with increased value and enhanced living space.
What You'll Need
Requirements for renovation mortgage approval
Comprehensive quotes from licensed contractors including:
- Scope of work breakdown
- Itemized cost estimates
- Project timelines
- Materials specifications
Work with qualified professionals who provide:
- Valid business licenses
- Liability insurance coverage
- Workers compensation insurance
- Verifiable references
Professional assessment determines:
- Current property value
- As-improved value after renovations
- Market comparables
- Renovation feasibility
Financial requirements vary by program:
- Minimum 5% down (CMHC insured)
- 20% down (conventional)
- 20% equity (refinance)
- Good credit score (typically 650+)
Tips for Success
Make the most of your renovation mortgage
Plan Thoroughly Before You Start
Take time to research designs, materials, and costs. The more detailed your plan, the smoother the approval process and the fewer surprises during construction. Consider hiring a designer or architect for major projects.
Budget for Contingencies
Add 10-20% to your renovation budget for unexpected costs. Hidden issues like electrical problems, plumbing repairs, or structural concerns often emerge during renovation projects. Having a financial buffer prevents project delays.
Vet Contractors Carefully
Get multiple quotes, check references, verify licenses and insurance, and review past work. A reliable contractor is crucial for staying on budget and timeline. Don't automatically choose the lowest bid—quality matters.
Set Realistic Timelines
Account for permit approvals, material delivery delays, and contractor availability. Rush jobs often cost more and result in lower quality. Build buffer time into your schedule to accommodate unexpected delays without stress.
Focus on Value-Adding Improvements
Prioritize renovations that increase property value and appeal to future buyers. Kitchen and bathroom updates, energy efficiency improvements, and additional living space typically offer the best return on investment.
Document Everything
Keep detailed records of all contracts, invoices, permits, and communications. Take photos before, during, and after construction. This documentation helps with inspections, insurance claims, and proving improvements when you sell.
What Our Clients Say
Real stories from homeowners who transformed their properties
"We bought our first home using the Purchase Plus Improvements program. The team helped us navigate the entire process, from getting pre-approved to coordinating with contractors. We saved thousands compared to taking out separate loans for renovations."
"After 15 years in our home, we wanted to do a major kitchen renovation and finish the basement. The refinance renovation mortgage gave us access to our equity at great rates. The staged payment system ensured contractors stayed on schedule."
"We found a great property in a perfect location but it needed work. The renovation mortgage made it possible to buy and renovate without draining our savings. Our home is now worth $100K more than we paid, including renovation costs!"
Ready to Transform Your Home?
Let's discuss your renovation plans and find the perfect financing solution for your project. Our mortgage specialists are here to guide you every step of the way.