How to Finance Renovations When Buying a Home in Canada

Alexander M.K. Radojcic • September 16, 2026

Can’t Find the Right Home After You’re Pre-Approved? There’s Another Option

The best place to start any home purchase is with a mortgage pre-approval. It gives you clarity around your budget and lets you shop with confidence.


But what happens when you’ve been pre-approved, you know where you want to live—and nothing suitable fits your price range?


This is a common challenge, especially for first-time homebuyers. Before buyer fatigue sets in, it may be worth considering a different approach: buying a home that needs work and financing the renovations as part of your mortgage.


What Is a Purchase Plus Improvements Mortgage?

A purchase plus improvements program allows you to buy a property and include the cost of approved renovations directly in your mortgage.

This can be a great solution if:

  • You can’t find a move-in-ready home within budget
  • You’re open to renovations
  • You want to customize the home from the start


It opens up more options and can help you get into a location or property that would otherwise be out of reach.


How the Process Works

While the idea is straightforward, the process itself is structured and requires planning.


Here’s a high-level overview:

  1. Renovation quotes are required upfront
    You’ll need detailed quotes for the work you want completed before final mortgage approval.
  2. Renovations must add value
    The lender must be satisfied that the improvements will increase the property’s value accordingly.
  3. Funds are reimbursed, not advanced
    You pay for the renovations initially. Once the work is completed and verified by an appraiser, the lender reimburses you and adds the cost to your mortgage.


With the right guidance, this process is very manageable—but it’s important to understand the steps before committing.


Is This Program Right for You?

Purchase plus improvements isn’t for everyone.

Buying a home is already a big undertaking, and adding renovations can increase stress—especially if timelines, budgets, or contractors become challenging.


That said, if you’re financially prepared and like the idea of shaping the home to fit your needs, this program can be an excellent way to get more value and flexibility from your purchase.


Final Thoughts

If you’re struggling to find the right home after being pre-approved, you may not need to lower your expectations—you may just need a different strategy.


If you’d like to explore whether a purchase plus improvements mortgage makes sense for you, feel free to connect. I’d be happy to walk you through the process and outline exactly what this option would look like in your situation.


If you would like more information on how this subject matter may affect you, your mortgage or your financial future, please do not hesitate to reach out anytime.

LET'S CONNECT
Alexander M.K. Radojcic 

Mortgage Broker

License #M21001839

LET'S CONNECT
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