Can I roll renovation costs into my mortgage when buying a home in Ontario?

Yes — a purchase plus improvements mortgage lets you include the cost of planned renovations in your purchase mortgage rather than financing them separately after closing. The idea is that the upgrades will increase the property's value, so the lender can use the improved value as the basis for the mortgage amount.

To qualify, the renovations typically must be cosmetic or structural improvements that add lasting value — not appliances or personal property. You submit detailed quotes for the work as part of your mortgage application. The lender approves the higher amount based on an estimated post-improvement value from an appraiser. The additional funds are held back until the work is completed and inspected; once the lender is satisfied, the holdback is released.

This product can be attractive because it avoids having to carry an expensive renovation loan or credit line separately. However, not all lenders offer it, and the underwriting is more complex than a straightforward purchase mortgage. The renovation must be completed within a specific timeframe after closing. If your down payment is under twenty percent, a purchase plus improvements mortgage can also qualify for CMHC default insurance on the combined amount. Speak with your mortgage broker early to determine which lenders offer this product and what documentation is required.