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Renovation Mortgage in BC: How to Finance Home Improvements
Quick answer: If you are buying, purchase plus improvements adds the cost of a renovation to your mortgage so you pay for it at mortgage rates. If you already own, a HELOC, a refinance or a second mortgage can fund the work. Asim Ali compares the options, including the cost of any penalty, so you use the one that costs the least.
What would a renovation add to your mortgage?
With purchase plus improvements, the lender values the home as it will be after the work, adds the renovation to the mortgage and holds those funds back until the work is done.
Monthly payment including the renovation
$4,426
Based on our 5 year fixed rate of 4.75% (APR 4.75%, 5 year term) over 25 years, before any insurance premium. You pay the contractor first, or arrange interim funds, because the holdback is released after an inspection.
Your options for renovation financing
| Option | When it fits | Watch for |
|---|---|---|
| Purchase plus improvements | Buying a home that needs work | Funds released after the work, quotes needed before closing |
| HELOC | Owners with equity, work done in stages | Variable rate, interest only unless you pay more |
| Refinance | Large projects, or near renewal | A penalty if you break mid term |
| Second mortgage | When breaking the first mortgage costs too much | Higher rate, plan to pay off or refinance |
| Construction financing | Major rebuilds, additions or a new home | Draws tied to stages of work |
Read purchase plus improvements explained, see HELOCs and home equity loans, second mortgages and construction financing, and check what breaking your mortgage would cost with the mortgage penalty calculator.
Adding a suite or a laneway home
BC now allows more homes on many residential lots, and a legal suite or laneway home can add rental income. Lenders can count part of the expected rent once the unit is legal, and some finance the build through a refinance or construction draws. Bring your plans and permits to your first conversation with Asim.
Talk to Asim about your mortgage
Call 604‑591‑3590 now, or send your details and Asim will reply within one business day.
Call Asim now: 604‑591‑3590Book an appointment
Frequently asked questions
Can I add renovation costs to my mortgage when I buy?
Yes, with purchase plus improvements. The lender adds the cost of the work to your mortgage based on contractor quotes and the home's value after the work, then releases the money once the work is done and inspected.
How much can purchase plus improvements cover?
It is often limited to about 10% of the purchase price on insured mortgages, and some lenders allow more on conventional mortgages. Asim checks the limit for your purchase before you write the offer.
What is the least costly way to finance a renovation if I already own my home?
A HELOC or adding funds at renewal usually costs the least. Breaking your mortgage to refinance can cost a penalty, so a second mortgage can make sense when the penalty is large.
When do I get the renovation money?
After the work is complete and the lender's inspector or appraiser confirms it, the funds are released to your lawyer. You may need to pay the contractor first or arrange interim funds.
Want a lender's view of your numbers? Book an appointment with Asim Ali, ranked #4 in the CMP Top 75 Mortgage Brokers in Canada for 2026, or call 604‑591‑3590.