Building or buying new construction in BC means your financing has to match the builder’s timeline, not the other way around. In my experience, three structures cover almost every situation. A completion mortgage advances the funds on possession day, which is the standard setup for presales and spec homes, whether that’s a downtown Kelowna condo tower or a hillside build in Wilden or McKinley Beach. A progress-draw mortgage advances funds in stages as your custom build passes inspections: foundation, lock-up, and completion. And then there’s builder’s-choice financing, which I’d always compare against the wider market rather than accepting by default.
So where do buyers get caught? A few spots come up again and again. Deposit structures on presales often run 15-20%, staged over several months. Rate holds can expire before a long build timeline wraps up. I see that one most with Alberta buyers relocating to the Okanagan, who often sign a presale a year or more before they actually move. GST applies on new homes, and its rebate thresholds trip people up more than you’d think. And late in a hot phase, appraisals sometimes come in below the contract price. The good news is that each of these has a clean solution when it’s structured before you sign, not after.
Planning a build or presale in the Central Okanagan? Have a look at how Lake Country’s new-build market works, get pre-approved first, then give me a call at 250-859-2100. I’ll structure the draws, holds, and closing so the build is the only complicated part. Book a free consultation whenever you’re ready.
Frequently asked questions
How does a construction mortgage pay out?
In draws tied to build stages, foundation, lock-up, completion, with an inspection before each release. You pay interest only on what’s been advanced, and it converts to a normal mortgage at completion.
What about presale deposits?
Presales typically want 10% to 20% in staged deposits long before completion; your mortgage only starts at closing. The deposits are your own cash or borrowed equity, and rate holds matter because completion can be a year or more away.
Is GST really 5% on a new home?
Yes, with a rebate that phases out above certain price points. Whether GST is inside the quoted price or on top of it is a contract detail worth reading twice. The closing-costs calculator handles both cases.