JD Lazar
Mortgage Broker - M14000067
Tel: 416-817-0103 | Cell: 416-817-0103
Lazar Mortgages | Purchase Plus Improvements Guide
Ontario’s housing market can be competitive — and inventory doesn’t always offer the “perfect” home.
You might find a property in the right neighbourhood, at the right price… but the kitchen feels dated. The basement is unfinished. The flooring needs updating.
The good news?
You don’t have to settle.
With a Purchase Plus Improvements Mortgage, you can buy the home with potential — and finance the renovations into one simple mortgage.
At Lazar Mortgages, we help Ontario buyers use this strategy to turn “almost perfect” into “exactly right.”
A Purchase Plus Improvements Mortgage allows you to:
Buy a home
Add renovation costs to the mortgage
Make one combined payment
Put as little as 5% down (if insured)
Instead of paying out-of-pocket for renovations after closing, the improvement costs are built into your mortgage from day one.
These mortgages are typically insured through:
Canada Mortgage and Housing Corporation
Sagen
Canada Guaranty
As a general guideline:
Renovations must increase the value of the home
Cosmetic and functional upgrades are allowed
Common cap: around $40,000
In some cases: approvals up to $75,000–$100,000
Each lender has specific rules — we structure it properly from the start.
Let’s walk through it step by step.
While viewing homes, start thinking strategically:
What would you change?
What needs updating?
Could a finished basement add value?
Once you find the right property, bring in a licensed contractor to provide a detailed written quote for the work.
After your offer is accepted, you send us:
Signed Agreement of Purchase and Sale
Detailed contractor quote
We then structure your mortgage approval including the renovation costs.
On possession day:
Your lawyer advances the purchase price only to the seller
The renovation funds are held back
You typically have 90 days to complete the approved renovations.
Once the work is finished:
An inspector confirms completion
The lender authorizes release of funds
Your lawyer releases the renovation portion to you or your contractor
Purchase price: $600,000
Renovations: $35,000
New total mortgage amount: $635,000
Minimum down payment (5%) is calculated on $635,000 — not just the purchase price.
That’s a key detail many buyers don’t realize.
Eligible properties in Ontario must:
Be 1–4 residential units
Have at least one unit as your principal residence
Be new construction or resale
This strategy works for single-family homes, townhomes, and certain small multi-unit properties.
Yes — and this is where things get powerful.
If you’re creating a legal secondary suite:
Some lenders allow you to use projected rental income
This can increase your qualifying power
It may allow you to afford more home than you otherwise could.
We structure these carefully to meet Ontario lending guidelines and municipal requirements.
Renovation funds are released after the work is completed and inspected.
Important:
You must have a plan to pay contractors upfront if required.
Common solutions:
Savings
Line of credit
Staged contractor payments
Some lenders allow staged payouts for larger projects, releasing funds in phases as portions of work are completed.
This can significantly improve cash flow during longer renovations.
Typically:
90 days after closing
In certain cases, extensions may be possible — depending on lender guidelines.
Yes — with limitations.
If you’re completing renovations yourself:
Lenders will typically cover materials only
Labour is not reimbursed
You must keep all receipts
Proof of payment is required before funds are released
DIY can save money — but documentation is critical.
If renovations are not completed:
The improvement portion is applied to your mortgage principal
Your mortgage payment remains unchanged for the term
This is why planning and commitment upfront is important.
Get fully pre-approved before shopping so you understand your maximum budget.
Identify renovation opportunities while house hunting.
Licensed contractors must provide detailed written estimates.
We submit your file including renovation costs for final lender approval.
Purchase funds are advanced.
Finish approved work within required timeline.
Lender confirms work is complete.
Renovation funds are disbursed.
Move in — upgraded and customized.
This strategy works well if:
Inventory is limited in your target area
You’re comfortable managing renovations
You want to build equity immediately
You see potential others might overlook
In Ontario’s competitive market, this can be a powerful advantage.
You don’t need to find the perfect home.
You need to find the right foundation — and a smart financing strategy.
At Lazar Mortgages, we:
Run full renovation-inclusive approvals
Coordinate with lenders and insurers
Structure secondary suite qualifications
Help you maximize long-term equity
If you're shopping in Ontario and want to explore Purchase Plus Improvements, let’s map it out properly.
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