There's something special about being the first person to live in a brand-new home. Everything is fresh, nothing needs fixing, and it's yours from the very start. But getting a mortgage for a new build works a little differently than buying an existing home.

How New Build Mortgages Work

When you buy an existing home, you get approved, sign papers, and move in — usually within 30 to 60 days. With a new build, the timeline can be months or even over a year. That changes how the mortgage works.

Here's the typical process:

  • You sign a purchase agreement with the builder
  • You pay a deposit (usually in installments — like $5,000 now, another $5,000 in 30 days, etc.)
  • You get pre-approved for a mortgage
  • The builder builds the home (this can take 6 to 18 months)
  • When the home is ready, you finalize your mortgage and close

Rate Holds: Locking In Your Rate

Since new builds take time, you'll want to lock in a mortgage rate early. Most lenders offer rate holds of 90 to 120 days. Some go up to 180 days.

But what if your home isn't ready for 12 months? That's where it gets tricky. You might need to get a new rate hold closer to your closing date. The rate available at that time could be higher or lower than what's available today.

A mortgage broker can help you time this right and find lenders with the longest rate holds.

What About Progress Draws?

Some new builds — especially custom homes — use something called progress draws. Instead of getting the full mortgage at the end, the lender releases money in stages as the home is being built.

For example:

  • 25% when the foundation is done
  • 25% when the framing is complete
  • 25% when the home is enclosed (roof, windows)
  • 25% when the home is finished

Not every new build uses progress draws. If you're buying from a large builder in a subdivision, you'll usually just get your mortgage at the end when the home is complete.

What You Need to Watch Out For

  • Closing date changes — Builders sometimes push back the completion date. Make sure your financing can handle a delay.
  • GST — New homes are subject to GST. Some builders include it in the price, some don't. Always ask.
  • Upgrades — Those granite countertops and hardwood floors cost extra. Make sure your budget accounts for upgrades.
  • Builder reputation — Do your research. Check reviews, visit their other projects, and ask around.

A new build is exciting, but the mortgage side needs careful planning. The timeline is longer, the moving parts are different, and the details matter.

Bottom Line

Buying a new build is a great choice — you just need to be prepared for a longer process and a few extra steps on the mortgage side. With the right guidance, it all comes together smoothly.

Get in touch and let's start planning your new build mortgage.