A construction mortgage is not a normal mortgage — the bank pays for the house as it's built, in stages, against inspections. Once you understand the draw machine, the whole process stops being intimidating.
How the money actually flows
You qualify for the full amount up front, but funds are advanced in draws tied to completed milestones. After each stage, the lender's inspector or appraiser confirms progress and releases the next tranche:
The three things lenders actually check
Lenders lend against a detailed, line-item construction contract — a fixed-price design-build contract is the cleanest package you can hand them.
You're underwritten on the finished home's value and your ability to carry the final mortgage, not just the land.
BC lenders require a Licensed Residential Builder and third-party home warranty enrolment before first draw.
The holdback everyone forgets
BC's Builders Lien Act requires 10% of each payment to be held back for 55 days after substantial completion. It protects you from trade liens — but it means your cash-flow plan must carry that 10% gap. We structure our draw schedules around it so nobody discovers the holdback at the worst moment.
Our fixed-price contracts and draw schedules are built to sail through underwriting — see how at a free consultation.
✱ Representative planning figures for Metro Vancouver, mid-2026 — assembled from municipal permitting schedules, the BC Energy Step Code framework and Armacan project records. Every lot and scope is different: treat these as orientation, not a quote, and confirm against your property in a free consultation.
