Services · 08 · Pre-construction
Buying before it is built.
A pre-construction purchase closes years after you sign. The mortgage has to be planned for the day the builder asks for the money, not the day you buy.
08
What it is
With a new-build home or condo you sign an agreement and pay a deposit in stages, then wait, sometimes for years. The mortgage is only advanced at final closing, at the rates and rules of that day, on an appraisal done then.
So the planning is different: an approval with a long rate hold where one is available, a budget for closing adjustments and tax, and a second look at the numbers well before occupancy.
Who it is for
- First-time buyers of a new condo or townhouse
- Investors buying a unit to rent
- Buyers whose occupancy date is approaching
- Buyers worried the appraisal will come in below the purchase price
How it works
Before you sign
Have a lawyer review the agreement during the cooling-off period, and check that the numbers still work at a higher rate.
Deposits
Paid in stages to the builder's lawyer, in trust.
Occupancy
With a condo you may move in and pay a monthly occupancy fee before you own the unit.
Final closing
The mortgage is advanced, and you pay adjustments, land transfer tax and any tax not covered by a rebate.
Documents to have ready
A starting list. Your own checklist is built after the first conversation.
- The agreement of purchase and sale, with every amendment
- Deposit receipts
- Income and down payment documents, updated near closing
- The builder's statement of adjustments, when it is issued
- Government photo ID
Common questions
Can I get an approval now for a closing two years away?
Some lenders offer new-build approvals with long rate holds, but the final approval is confirmed close to closing with updated documents. Income, credit and lending rules can all change in between.
What if the appraisal is lower than my price?
The lender lends on the lower figure and you cover the gap in cash. We look at this risk early, and at the options: another lender, a larger down payment or added security.
What is the cooling-off period?
For a new condominium in Ontario you have 10 days to cancel after you receive the signed agreement and the disclosure documents. A new freehold house generally has no such period unless the agreement gives one.
Is my deposit protected?
Deposits on new homes in Ontario are protected through Tarion up to set limits, and condominium deposits must be held in trust. Ask your lawyer how much of yours is covered.
Do I pay HST?
The price usually includes HST with the rebate assigned to the builder, on the condition that you or a close relative will live in the home. Investors generally pay more at closing and claim a rebate afterwards. New rebates were introduced in 2025 and 2026; your lawyer confirms which apply to your agreement.
Talk it through with Hamed.
Eight questions, about a minute. Hamed reviews your answers and calls you, usually the same business day.