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What Renovations Can I Make With A Purchase Plus Improvements Mortgage?

You know the good news: if you’ve found your “almost” dream home, there’s a financing solution to make it just right for you. But what does almost cover? Let’s take a look at what renovations are eligible for a purchase plus improvements mortgage.

What is Covered?

The most important thing to remember with this financing program is that the renovations you are undertaking must add value to the property. That means you’re facing something more substantial than a new coat of paint. At the same time, if the proposed improvements are greater than 20% of the initial purchase price or $40,000, the mortgage insurer will require a full appraisal of the property. The sweet spot is somewhere between these 2 points and could include:

  • Updated flooring
    If the property you’re considering has ancient linoleum or worn carpets, you may want to replace the flooring with a modern solution, or even restore some of the original floors if they are hardwood.
  • Bathroom remodel
    Make a small or poorly laid-out bathroom more functional, with new plumbing and fixtures.
  • Kitchen makeover
    Create your culinary paradise with a layout to suit your needs, including cabinets, countertops, and sinks. But beware – appliances aren’t covered under the mortgage!

What Can’t I Claim?

As mentioned above, anything that would be moveable property, or personal chattel in legal documents, isn’t eligible under this program. For example,

  • your dream sectional sofa (furniture),
  • a professional cooking range (appliances), and
  • a top-of-the-line tv (electronics)

could not be funded through your mortgage.

A Client Story

George and Angela found a great home in a neighbourhood they loved. The $350,000 price was appealing and the bones of the home were great, but the current owners had not updated it since it was built in the late 1970s. After looking at what needed to be done and getting some quotes for the work, the couple determined $35,000 worth of improvements would bring the house up to date. However, with the bulk of their savings going toward the down payment, there was little money left for renovations.

We were able to secure a mortgage for George and Angela with a lender that qualified for the Purchase Plus Improvements program. They qualified by investing 5% of the purchase price plus renovation cost as a down payment. The $35,000 renovation cost was added to their mortgage, and they received the funds once the new flooring and updated kitchen renovations were completed. In the end, their purchase plus improvements price was $385,000 and the required down payment was $19,250.

Now in their newly renovated place, George and Angela are enjoying a home that’s just right for them.

A Home That Fits You

A Purchase Plus Improvements mortgage isn’t the solution if you’re looking for an extreme home makeover. It could be the right fit if you’re buying a new home and need some small – but significant – fixes to make it perfect for you.

If you’re ready to turn “almost” into your dream home, get in touch with our expert team. Call for your free consultation with a mortgage specialist at 250-590-6520 (toll-free 1-855-590-6520). Walk-ins are welcome at our 307 Goldstream Avenue location during regular business hours, and we can arrange appointments evenings and weekends to suit your schedule.

Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.

This post reflects the best available information at the time of writing/last update. In order to ensure that you have the most up-to-date information, contact us to confirm the details for your specific situation.

Originally posted February 2018
Updated February 2020

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