New builds and construction mortgages
Evergreen, Timberlands North, Hazlett Lake or your own lot: financing that matches the build.
Photo: Red Deer, Alberta by Quintin Soloviev, CC BY 4.0 (darkened, cropped) · Credits
Two ways to finance a new home
Completion (or "spec") mortgages are the most common choice in Red Deer's new communities. You sign with a builder, pay deposits along the way, and the mortgage funds once the home is finished and has its occupancy permit. If possession is many months away, I'll look for a lender willing to hold your approval for longer, or plan a re-approval before closing.
Progress-draw mortgages are used when you own the lot and hire a builder, or you're building on an acreage. The lender releases money in stages after an inspector confirms each phase, so you need enough cash, or a line of credit, to cover costs between draws.
Where Red Deer is building
Recent construction is concentrated in places like Evergreen, Timberlands North, Hazlett Lake, Laredo and Capstone near downtown, plus new subdivisions in Blackfalds, Penhold and Sylvan Lake. Each builder has different deposit schedules and contract terms. Before you sign, have a lawyer read the purchase agreement, especially clauses on delays, price changes and assignment.
Rules that help new-build buyers
- Insured mortgages on newly built homes can be amortized up to 30 years, for any buyer, since December 15, 2024 (Finance Canada).
- Eligible first-time buyers can claim a rebate of the GST on new homes up to $1 million, with a reduced rebate to $1.5 million (CRA).
- Under Alberta's New Home Buyer Protection Act, builders must enrol new homes in warranty coverage, which protects key components for up to 10 years; owner-builders with an authorization can opt out (Government of Alberta). Lenders often ask for the warranty enrolment before funding.
Planning a suite?
Some buyers build with a basement or backyard suite in mind. In Red Deer, backyard suites need development and building permits, and each neighbourhood caps house and backyard suites at 15% of homes. Timberlands North lists backyard suites as a permitted use; most other neighbourhoods treat them as discretionary (City of Red Deer). Lenders will only count rental income from a legal, permitted suite.
Questions people ask
Can I get pre-approved for a home that won't be ready for a year?
Many lenders cap rate holds at about four months, but some offer longer holds for new builds. Otherwise we get you approved now and re-confirm closer to possession.
Do builder deposits count toward my down payment?
Yes. Deposits paid to the builder are credited at closing and count as part of your down payment, as long as they're documented.
What happens if construction runs late?
Your approval may need to be extended or renewed. Read the delay clauses in your builder contract and keep me updated as dates shift.
Let's map out your next move
Twenty minutes on the phone usually answers more than an evening of online calculators. There's no cost to talk and no obligation to proceed.
Shorter question? Grab a 30-minute slot (opens in a new tab), email johnantle@gopineapple.com or use the contact form.
Photo: Red Deer River, Red Deer, AB by Kevin M. Klerks (kevinmklerks), CC BY 2.0 (darkened, cropped) · Credits
