What is a Purchase Plus Improvements Mortgage?
If you’ve been house hunting lately, you might have found yourself saying something like:
“This place is almost perfect… if only the kitchen was updated or the flooring was newer!”
Sound familiar? You're not alone.
Many buyers are finding that their dream home is just one renovation away—and that’s exactly where a Purchase Plus Improvements mortgage comes in.
So, what is a Purchase Plus Improvements mortgage?
In simple terms, this type of mortgage allows you to roll the cost of eligible renovations into your mortgage at the time of purchase. That means instead of scrambling for cash after moving in, you can finance your upgrades right from the start—often at the same low interest rate as the rest of your mortgage.
A Real-World Example:
Let’s say you buy a home for $500,000, but you want to redo the kitchen and flooring, which will cost $40,000. With a Purchase Plus Improvements mortgage, you can borrow $540,000 up front—provided you meet the lending criteria and provide quotes for the work ahead of time.
How does it work?
Here’s a simplified step-by-step:
Find the home you want to buy, even if it needs a little love.
Get quotes for the renovations you plan to do.
Apply for the mortgage with the total amount (purchase price + renovation costs).
After closing, you pay for the renovations—usually out of pocket at first.
Once the work is complete and verified (usually by an appraiser or inspector), the lender reimburses you the approved renovation funds.
Pro tip: Keep your receipts and make sure the renovations are completed within the required time frame—usually 90 to 120 days.
What kinds of improvements qualify?
Generally, the upgrades must be permanent and add value to the home. Think:
New kitchens or bathrooms
Flooring
Roofing
Windows or doors
Energy-efficient upgrades (like insulation or a new furnace)
Cosmetic touches like new furniture or décor don’t usually count, but feel free to ask if you're unsure.
Why consider it?
✅ Access better homes in your price range (especially in competitive markets)
✅ Avoid high-interest credit cards or loans for renos after the fact
✅ Bundle everything into one simple mortgage payment
✅ Start enjoying your upgraded home right away
Is it right for you?
If you’re handy, have a clear vision for your space, or just want to avoid the fixer-upper blues, a Purchase Plus Improvements mortgage might be the ideal solution.
As your mortgage broker, I can walk you through the process, help you find the right lender, and make sure the paperwork is done properly—so you can focus on turning your new house into a home.
Thinking about buying a home that needs a little work?
Let’s chat and see if this strategy makes sense for you. Sometimes the perfect home just needs a little polishing—and I’m here to help you make it happen!