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I Want to Buy a Fixer Upper … But how do I afford the Fixing Part?

Renovations Nathan Lawrence 26 Sep

So you found the perfect home, but it needs a little TLC. Maybe you need a new roof, new furnace, new windows, or a kitchen update. All of these renovations can add up quickly and like many first time buyers, you may not have the money to cover the costs of these expensive renovations.

The good news is that there is a solution! It’s called a purchase + improvements mortgage. This allows you to purchase the home and get extra money to do the repairs as part of your total mortgage. Rather than having to come up with $10K or $20K to pay for improvements, this can be added into your mortgage. Your interest rate will also be lower than if you were to apply for an unsecured personal line of credit or putting the renovation costs onto your credit cards.

A few particulars to understand …

  • Estimates for the work will be required to get an approval for improvements.
  • Lenders and CMHC look for improvements that will add value to the home.
  • Improvements are typically required to be completed within 60-90 days from time of purchase.
  • The money for the improvements is released to you after the work is completed so you may require a way of carrying some costs until the work is done.
  • The improvements can be completed by yourself or a contractor. If doing the work yourself, only the costs of materials can be covered.
  • Depending on the scope of the work, applicable permits may be required.


Lenders don’t mind lending money to do improvements as it adds to the value and marketability of the home. A purchase plus improvement mortgage is a great way of turning that home with potential into your dream home. When getting pre-approved for your mortgage take the time to speak with your realtor and mortgage broker about how a purchase plus improvement mortgage may work for you!