Hi, I'm Erica, a research analyst here at Helio Urban Development. I'm excited to walk you through the ins and outs of getting a construction mortgage for your first home build in the Halifax Regional Municipality (HRM). If you've been Googling terms like "construction mortgage HRM" or "first-time builder Nova Scotia loan", you're not alone – building a home from scratch is a different ballgame than buying an existing house. Don't worry, I'll break it all down in a friendly, approachable way.
Brand Note: Helio Urban Development uses a fixed-price approach to building homes in Nova Scotia, providing cost stability that banks love when approving construction mortgages. Our clear, upfront pricing makes financing easier for first-time builders!
In this post, we'll explore how construction mortgages differ from regular home loans and why first-time builders in Nova Scotia might need a bit of extra guidance. I'll also share local insights comparing Halifax and Dartmouth lenders, plus tips to improve your chances of approval. And since Helio Urban Development uses a fixed-price approach to building, I'll highlight why that cost stability is a big win for both you and your lender. Let's dive in!
Building a house means financing works a little differently. A construction mortgage (sometimes called a builder's mortgage) isn't like the standard mortgage you get when you buy a move-in-ready home. Here's a quick rundown of how construction mortgages work and what makes them unique:
Instead of a one-time lump sum at closing, construction funds are paid out in draws – installments tied to project milestones. For example, a portion of the loan might be released when the foundation is complete, another chunk at framing, and so on, until the final draw at completion. Each draw usually requires an inspection to confirm that stage is finished before the next payment is approved. (Yes, you'll get to know your inspector quite well!)
During the build, you typically pay interest only on the money you've drawn so far, not the full loan amount. This keeps your costs lower while the house is being built. Once the home is finished and you take occupancy, the loan usually converts into a regular mortgage, and you'll start making payments on both principal and interest.
Because construction loans are a bit riskier for lenders, they often require a larger down payment than a normal mortgage. In Nova Scotia (and Canada in general), expect to put down 20-25% of the total project cost at minimum. Some lenders might ask for even more (up to 30%) if the project is complex or if you're a new builder.
Approval takes more planning: Getting approved for a construction mortgage involves all the usual income and credit checks plus a thorough review of your building plans. Lenders will want to see detailed blueprints, budgets, and schedules for the project, and usually a signed contract with a professional builder or contractor. They may also require that your builder be a licensed professional with a solid track record.
In short, a construction mortgage has more moving parts than a typical home loan. The draw schedule keeps money flowing as work progresses, and you'll need to front a larger down payment and prepare extra documentation. The upside is that with the right prep, you can finance your dream home and the land it's on in one package. Speaking of which, let's look at what options you have for construction financing in Nova Scotia.
You might be wondering, which lenders even offer construction mortgages in HRM? The good news is several do – from big banks to local credit unions. Each may have slightly different terms, but all follow the general principles above. Here's an overview of potential lenders and what they bring to the table:
RBC is a popular choice for construction mortgages in Nova Scotia. They have dedicated mortgage specialists with in-depth knowledge of construction financing. RBC's program can finance both the purchase of your lot and the construction costs under one mortgage, which is super convenient. They even introduced a special program to help people add rental suites or multiple units to a property – a testament to how flexible their construction loans can be. With RBC, you can expect a structured draw schedule and support throughout the build; they understand the process well.
BMO also offers construction mortgages for first-time builders. While details aren't splashed on their website as openly, BMO's requirements will be similar – typically around 20% down and interest-only during construction. One notable aspect some borrowers report is that BMO does not require the builder to be on an "approved" list (some lenders maintain lists of pre-vetted builders). That said, you'll still need a reputable builder and solid plans for BMO to approve the loan. It's worth sitting down with a BMO mortgage advisor to get the specifics, as they can walk you through their draw process.
Bank Requirements: No matter which lender you choose, they'll typically want to see a professional builder contract, detailed budget, and clear timeline. Having these documents well-prepared before applying can significantly speed up the approval process.
TD Bank provides construction financing as part of their mortgage suite. TD will want to review your building contract and schedule carefully. They may allow either a single closing (one closing that later converts to a regular mortgage) or separate construction and permanent financing. Like others, TD typically asks for a fixed-price contract with your builder and a detailed cost breakdown upfront. Expect interest-only payments during the build.
TD's interest rates and fees for construction loans might be a tad higher than their standard mortgages (remember, lenders price in the extra risk), but those can convert to normal rates once your home is done.
Scotiabank (which has deep roots in Nova Scotia) advertises a "Home Builder Loan" that makes building or renovating "easy." In practice, their construction mortgage also uses progress draws and requires interest-only payments during construction. Scotiabank might offer a rate guarantee that holds your interest rate for the construction period and then converts to a regular mortgage term once you're ready to move in. If you're already a Scotiabank customer (or plan to be), check if they have any special programs or discounts for construction loans – sometimes banks give a small rate perk if you do all your banking with them.
Don't overlook credit unions in HRM – they often have competitive construction loan offerings and a personal touch. For example, Credit Union Atlantic (CUA) offers construction mortgages to individuals and builders and lays out a clear draw schedule: CUA typically does five advances, from when the home is "roof-tight" (weather-sealed) through to completion. They require inspections at stages like footing, framing, drywall, etc., similar to banks.
One difference is interest rate structure: CUA's construction loan charges interest at your agreed rate plus 1% during the build phase (to account for the short-term risk), then reverts to the normal rate after. Credit unions may also ask for a "home warranty" certificate if a contractor is building the home – a protection for you and the lender that the new home is warrantied against defects. The benefit of credit unions can be more flexibility on smaller projects and local decision-making.
Pro Tip: No matter which lender you consider, compare their terms: interest rates, any lender fees, how many draws they allow, and whether they require mortgage default insurance (CMHC/Sagen) for lower down payments. Big banks and credit unions alike will expect you to meet their credit and income criteria, and all will insist on a detailed building plan.
One thing I have to mention (proud Helio team member here!) is how choosing a builder with a fixed-price model – like Helio Urban Development – can significantly smooth out the financing process. Why do lenders love fixed-price contracts? In a word: predictability. When the cost of your build is locked in up front at, say, $X per square foot with a clear scope, the bank can underwrite your loan with confidence. There's far less worry that you'll come back halfway through the project saying, "Uh oh, we're 20% over budget because of surprise costs."
Many lenders actually require a fixed-price (aka "turn-key") contract as a condition of approving a construction mortgage. If you were to present a cost-plus contract (where the final price could change with material costs or delays), the bank might refuse financing or lend a much lower percentage of the cost. They just don't want to take on the risk of cost overruns. With Helio's fixed-price approach, the total build cost is agreed and locked in once the design and scope are finalized. That means no budgeting surprises for you or your lender.
Helio's model is per-square-foot pricing, which simplifies things further. For example, if your dream home is 2,000 sq.ft, and our fixed price is (hypothetically) $200/sq.ft, then your total build cost is $400,000 – period. We provide that detailed quote and contract to you, which you can hand directly to your lender. It checks off a lot of their boxes: a licensed builder contract, detailed cost breakdown, and timeline all in one. We've even had appraisers tell us it makes their job easier, because they can reliably assess the "as-completed" value of the home knowing the construction cost is firm.
Real-world example: One of our clients in Dartmouth secured a construction loan faster because of Helio's fixed-price contract. Their lender remarked that having a clear, fixed budget and schedule from day one sped up the approval – there was no back-and-forth about "what if the costs increase." The bank could see that the project was well-planned and fully costed, so they were comfortable proceeding.
In short, Helio's fixed-price model isn't just about giving you peace of mind; it actively helps with financing. Lenders appreciate the reduced risk, and you appreciate not having surprise bills. It's one of the reasons we at Helio adopted this model – to make the entire building process, from loan approval to move-in, as smooth as possible.
HRM is one big happy family, but as any local will tell you, Halifax and Dartmouth each have their own vibe. Does that extend to construction financing? Let's talk about any differences (if any) between building in Halifax vs. Dartmouth when dealing with lenders.
The short answer: there's not a huge difference in mortgage products or requirements – a construction loan in Halifax will function much the same as one in Dartmouth. All major banks and credit unions serve both sides of the harbour, and their criteria (credit scores, down payment, draw process) won't suddenly change based on your address. A bank isn't going to say, "Oh, this is Dartmouth? Different rules apply." It's all HRM to them.
That said, there are a couple of subtle distinctions to be aware of, mostly related to the projects themselves and lender preferences:
Halifax generally has higher land values, especially if you're building on the Halifax Peninsula or in established neighborhoods. Dartmouth, while booming, can have slightly lower land costs in some areas. How does this matter? Well, when you apply for a construction mortgage, the lender will do an appraisal of the future home value based on your plans and the land.
If you're building a $500,000 house in Halifax on a $300,000 lot, the total value might appraise higher (given higher comparables) than the same house on a $150,000 lot in Dartmouth. A higher appraisal can make the loan-to-value ratio more comfortable for the lender. In practical terms, it might be a tad easier to secure a larger loan in Halifax because the end value is there – but of course, the project cost is also higher. In Dartmouth, your costs might be a bit less, which means you might not need to borrow as much anyway.
All the big banks have branches in both Halifax and Dartmouth, but sometimes which lender you choose comes down to where you find good service. You might find that a particular bank branch in Dartmouth has a mortgage specialist who's very familiar with construction loans, or conversely a Halifax credit union manager who has helped many members build houses.
For example, we've seen clients in Dartmouth opt for a credit union because they felt the loan officers understood their needs and were even excited about a new build in the community. In Halifax, some clients stick with big banks like RBC or Scotiabank especially if they're undertaking larger builds or multi-unit projects (since those banks have specialized programs). It can be a matter of personal comfort. The key is to work with a lender (or broker) who understands you and the area where you're building.
Permits and timelines: This isn't a lender difference per se, but worth noting: HRM handles building permits for both Halifax and Dartmouth under the same regional rules. However, if you're building on a well and septic in a more rural part of Dartmouth, there are additional steps (like well water tests, septic approvals) that your lender may ask about or require documentation for.
Case in point: We had a Helio client build in Halifax who worked with RBC and sailed through the process, partly because the high land value and our fixed-price contract made the bank confident the investment was solid. Around the same time, another client built in the Dartmouth area and went with a local credit union; the loan officer actually visited the site during construction and was very hands-on in a helpful way.
So, whether you're Team Halifax or Team Dartmouth, rest assured you have plenty of financing options. Focus on finding a lender and a program that fits your project size and personal situation, rather than worrying about any geographic stigma. HRM lenders are experienced with construction mortgages in both Halifax and Dartmouth. The only real difference is the view – and where you'll be enjoying your new home once it's built!
Embarking on your first build in Halifax/Dartmouth is exciting, and a bit nerve-wracking. From my research (and seeing many Helio clients go through it), here are some final tips to boost your mortgage approval chances and avoid common pitfalls:
Before applying, check your credit score and try to clear any outstanding high-interest debts. Lenders typically want a score around 680+ for construction loans. Also, avoid taking on new loans or credit lines while your construction mortgage is in process – no new car or big credit card purchases, as these can hurt your approval or throw off your debt ratios.
Aim for at least 20% of your project cost saved up for the down payment (land + construction). More is even better, as it gives you a cushion. If your land is already paid for, the equity in it can count toward this – often the lender will consider the land value as your down payment portion. Having a larger stake not only helps you avoid needing mortgage insurance, but also makes the bank more confident in lending to you.
On top of the down payment, set aside an extra contingency fund (typically 5-10% of the build cost) in case of unexpected expenses or upgrades you decide on during construction. In fact, many lenders expect you to have some cash reserve beyond the contract price, just in case the build runs over budget. If you never need it, great – consider it move-in decorating money!
Preparation is half the battle. Be ready to provide detailed house plans, a construction contract, itemized cost quotes, and a project timeline to your lender. They'll also ask for the usual income proofs (pay stubs, job letter, tax returns) and asset statements. In HRM, you'll need a building permit before major construction starts, and lenders may want to see that too.
Include a new home warranty: If you're using a professional builder (which you likely are), ensure your build is enrolled in a new home warranty program (like the Atlantic Home Warranty). Some lenders, especially for first-time builds, require a warranty certificate prior to final funding. It's also a great safety net for you as the homeowner. Helio homes, for instance, come with a third-party warranty, which gives everyone peace of mind.
Surround yourself with a good team. This means a reputable builder (hi from Helio! 👋), and perhaps a mortgage broker or specialist who has done construction loans before. An experienced mortgage broker can shop around to find a lender that fits your needs and help navigate the paperwork. Similarly, a seasoned builder will manage the draw requests and inspections efficiently because they've done it many times. You don't have to do this alone – leverage expert help.
Time is money in construction. Most construction mortgage approvals come with an expected completion timeline (often 12 months). If delays occur, communicate with your lender – they can sometimes extend the draw period, but it might require re-approval or updates. Try to avoid unnecessary delays: secure subcontractors and materials ahead of time (your builder will handle much of this). Sticking to the schedule means you'll transition to your regular mortgage on time and avoid any lapses in financing.
Building a custom home is an evolving process, and it's tempting to make changes as you go ("Let's add a dormer window here!" or "What if we finish the basement now?"). But be cautious: changes can increase costs and may require lender sign-off if they're significant. Small tweaks are usually fine, but a major scope change could affect your appraisal value or require re-budgeting. If you do decide on a big change, loop in your lender and make sure you have funds to cover it (the contingency fund can help here). It's best to finalize your design before breaking ground – it will save you headaches later.
Treat your lender as a partner in the project. After all, they have a vested interest in seeing the home built successfully too! If something unexpected happens – a slight cost overrun, a contractor delay, etc. – let the lender know. They might have solutions, like adjusting the draw schedule or allowing use of contingency funds. Keeping the bank in the loop builds trust and can prevent panic at the final draw. Many lenders will send an inspector or appraiser at each stage; feel free to ask them questions as well. You want everyone on the same page until that last check is issued and you have the keys in hand.
Lastly, remember that patience and organization are your friends. The construction mortgage process has more steps than a regular mortgage, but with good prep and a reliable builder, it will go smoothly. Take it one milestone at a time, and soon you'll be living in a home you built – how cool is that?
Building your first home in HRM is a journey, and securing the right financing is one of the most important steps. We've covered a lot: how construction mortgages work (draws and all), what local lenders like RBC, BMO, TD, Scotiabank, and our Nova Scotia credit unions offer, and how being prepared can make all the difference. The key takeaways? Do your homework, have your finances in order, and choose partners who set you up for success. With a solid plan and team (and perhaps a fixed-price builder to keep things on track), even a first-time builder can navigate the construction loan process with confidence.
If you're dreaming about building a home in Halifax or Dartmouth, I hope this guide has demystified the mortgage part. It's a big learning curve, but absolutely manageable with the right info and support. And of course, if you need any guidance or want to explore building options, Helio Urban Development is here to help every step of the way. We love empowering first-time builders with knowledge and turnkey solutions.
Let Helio Urban Development help you navigate the construction process with our fixed-price building approach that lenders love. Our team of local experts can provide a custom home building plan that makes financing easier.
Contact Helio Urban DevelopmentThinking about building in Halifax or Dartmouth? Let's chat — Helio makes construction easy! Reach out to us on our website or drop by our office; we'd be thrilled to talk about your project and how we can make it a reality. Here's to building your dream home in HRM with confidence and excitement! 🎉🏠
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