How a Purchase Plus Improvements Mortgage Can Turn a Good House Into Your Dream Home
Found a home in the perfect Ottawa neighborhood, but it needs some work? Instead of stretching your budget for a fully updated house, a Purchase Plus Improvements (PPI) Mortgage allows you to finance renovations as part of your mortgage, so you can create your ideal home while keeping costs manageable.
With this program, buyers can borrow up to $100,000 above their mortgage for renovations—whether it's a new kitchen, updated flooring, finishing a basement, or replacing windows and a roof.
How the Purchase Plus Improvements Mortgage Works
The PPI mortgage is structured like a regular mortgage but includes extra steps for financing renovations:
Find a Home & Get Contractor Quotes
Once you've chosen a home, obtain detailed renovation quotes from licensed contractors outlining the cost and scope of work.
Submit to Your Mortgage Broker & Get Approved
Your broker submits the quotes to the lender, who approves the total loan amount, which includes the purchase price + renovation costs, minus your down payment.
Closing Day & Fund Allocation
On closing, the seller gets paid, and the lender holds the renovation funds in trust with your lawyer.
Complete the Renovations & Get Reimbursed
After taking possession, complete the approved renovations.
Your broker arranges an inspection/appraisal.
Once the work is verified, the lawyer releases the renovation funds so you can pay your contractor.
Example: Making It Work in Ottawa
Imagine you find a three-bedroom home in Elmvale Acres for $525,000, but it needs a kitchen renovation and new flooring. Instead of looking for a move-in-ready home at a higher price, you could:
Use a Purchase Plus Improvements mortgage and include $50,000 for renovations.
Get approved for a $575,000 mortgage (purchase price + improvements).
Complete the upgrades after closing and submit invoices for reimbursement.
This allows you to finance home improvements at mortgage rates, which are typically lower than personal loans or credit cards, while immediately increasing your home’s value.
Additional Benefits of a PPI Mortgage
Increase Your Borrowing Power – Some lenders factor in future rental income from a legal secondary suite, making it easier to qualify.
Access Funds in Stages – Some lenders allow up to three draws as renovations progress, helping with cash flow.
Upgrade Without Depleting Savings – This mortgage lets you renovate right away rather than saving for years.
Is a Purchase Plus Improvements Mortgage Right for You?
If you're considering buying a home in Ottawa that needs upgrades but aren’t sure how to finance the renovations, a Purchase Plus Improvements Mortgage could be the solution.
Want to explore this strategy for your next home? I can help you navigate the process, connect you with a mortgage broker, and find the right property for your vision and budget.
Maryam Ouach, REALTOR®
maryam@newpurveyors.com
