Any time we make a large investment, we want to feel confident about how the financial side is going to work. Building a custom home or cottage is no different. We often get two main questions from clients when it comes to the money side of the process:
- What is the payment schedule?
- What type of financing should I get?
Let’s walk through both questions, in order.
Step One: Understanding Your Payment Schedule
Before any deposits are taken, we begin with a conversation about your vision. We take the time to understand your wishlist, lifestyle, and needs—from square footage to location to finish level. With that information, we put together a preliminary budget.
This early budget helps ensure we’re working toward a design that fits your financial expectations. We have met many clients who came to us with fully engineered plans, only to find the cost to build exceeded their budget by a wide margin. This is a key reason we begin with budgeting first.
Once you’re comfortable with the estimate, we collect a $5,000 design deposit and begin designing your home or cottage. Each design is custom, so no two projects are ever the same.
As your floor plan, exterior, and key interior spaces begin to take shape, we then move into a more detailed budget stage. If you already have engineered drawings, we can skip design and move directly to this stage. With your approval of the second budget, a $20,000 deposit is made. We then proceed to detailed plans and engineering.
At this point, we can create a full quote with exact pricing and draft a contract based on that number.
Here is a typical payment schedule:
- $5,000 design deposit
- $20,000 phase two design deposit
- 10% down, based on contract value
- 15% when the foundation is complete
- 15% when framing is complete (less the $25,000 already paid)
- 15% after insulation and vapour barrier
- 15% when first-stage finishes are complete
- 15% when kitchen cabinetry is installed (not including countertops)
- 15% at possession
To see how the design deposits fit into the overall build timeline, refer to our article The Custom Build Process Explained.
Step Two: Financing Your Build with a Builder’s Mortgage
A builder’s mortgage is a specialized type of financing designed for staged construction. While each lender will have their own requirements, the general process is consistent across financial institutions.
Here is how a builder’s mortgage typically works:
1. Start with a Pre-Approval
Meet with your financial institution early to ask questions and get pre-approved. This helps you understand your budget before any design work begins. If you do not have a preferred lender, we’re happy to suggest one based on our experience. Contact us to get started.
2. Contract & Mortgage Approval
Once your build contract is signed, you provide it to your lender. They will structure your builder’s mortgage around the payment schedule outlined in your contract.
3. Release of Payments
Payments are released by your lender in stages. Here’s how that money moves:
- Lender releases funds to your lawyer
- Your lawyer transfers the payment to Pine Creek’s lawyer
- Pine Creek’s lawyer releases funds to us
4. Holdback Explained
At each stage, Pine Creek’s lawyer holds back 7.5% of the released amount. This is a legal requirement under the Builder’s Lien Act. It protects you in the unlikely event that a subcontractor goes unpaid and files a lien on your property.
5. Final Release at Possession
At possession, the homeowner signs a certificate confirming the build is complete. A 40-day period follows before the 7.5% holdback is released to Pine Creek Homes.
Why This Matters
The financing process for a custom build can feel complex, especially if it’s your first time navigating staged payments or working with a lawyer and lender in tandem. Our role is to help you move through this process with confidence.
Over the years, we’ve worked with many families who were initially overwhelmed by the financial steps involved. By the time their home or cottage is complete, they often tell us that the clarity of our payment process made all the difference.
This approach also gives you peace of mind that your design is rooted in real numbers from day one. You avoid costly surprises and can enjoy the creative side of the process, knowing that the financial foundation is solid.
If you have questions about how a builder’s mortgage would work for your specific situation, feel free to explore our financing FAQs or contact us. We’re here to help.
