Financing a New Build in Edmonton

Draw mortgages vs. completion mortgages

Most production-builder purchases (a home bought from a builder's inventory in a subdivision, whether spec or build-to-order) use a completion mortgage: your full mortgage amount is advanced at possession, the same way a resale mortgage works. The builder finances construction themselves; your lender doesn't get involved until the home is ready and title transfers to you.

A draw mortgage (or progress-draw mortgage) is different, and typically applies to custom or self-managed builds rather than a purchase from a volume builder: the lender releases funds in stages as construction progresses, with each draw usually tied to an inspection confirming that stage is complete (foundation, framing, lock-up, and so on). During construction you generally pay interest only on the amount actually drawn, not the full approved amount, and the mortgage converts to a standard amortizing mortgage once the home is complete.

Extended rate holds

A typical mortgage rate hold runs 90 to 120 days. That's a problem for a build-to-order home where possession might be six months to a year-plus away — your rate hold would expire long before you actually need the mortgage.

Many lenders offer extended rate holds specifically for new construction, commonly ranging from several months up to 12 months or more, to bridge that gap. Extended rate holds are not universal across every lender or mortgage product, and some come with conditions or costs the standard 90-day hold doesn't.

One feature worth asking about specifically: many (not all) extended rate hold products let you take the lower of the held rate or the rate available at closing, meaning you're protected if rates rise but not locked out of a better rate if they fall. This varies by lender and product, so don't assume it applies without confirming.

Deposit structures in Alberta

Your builder deposit and your mortgage down payment are related but not the same thing. The deposit is paid directly to the builder in stages through the build process (see our buying guide's section on builder contracts and deposits); it's typically credited toward your down payment at closing, with your mortgage covering the remaining balance due.

Deposit protection is a separate product from the core statutory warranty coverage, and — unlike that core coverage — it isn't legislated; it's offered by individual warranty providers and varies by provider. See our new home warranty guide for the full breakdown, including what one major provider currently offers.

GST rebate on new homes in Alberta

Alberta has no provincial sales tax, so GST (5% federal) is the only consumption tax that applies to a new-construction home purchase — a genuine difference from provinces with HST, where the combined rate is much higher. Buyers of new construction may qualify for a partial rebate of that GST through the GST New Housing Rebate, provided the home is intended as a primary residence (yours or a close relation's) and the purchase price falls under the program's thresholds.

Two things about this rebate are important to get right, and both are exactly the kind of detail that changes over time:

• The price thresholds that determine how much rebate you get (full rebate below one threshold, phasing out to zero above a higher one) are set federally and have historically not moved anywhere near as fast as home prices have. There has also been recent federal policy activity specifically around an enhanced GST rebate for first-time buyers on new construction, which — if in effect — would use different thresholds than the long-standing general rebate.
• In practice, many builders quote pricing with GST already netted against the rebate, and have the buyer assign their rebate entitlement to the builder in exchange for a lower sticker price, rather than the buyer claiming it directly from CRA after closing. Whether this is how a specific purchase is structured is a contract detail, not a default you should assume.

There's also a separate New Residential Rental Property (NRRP) rebate with different rules if you intend to rent the home out rather than live in it — a different program from the owner-occupied rebate above, not a variation of it.

Closing costs on a new build

Some closing costs are the same as any purchase; a few are specific to new construction:

• Legal fees — for reviewing the purchase agreement and completing the transfer
• Alberta land titles registration fees — Alberta doesn't have a land transfer tax the way Ontario or BC does, but there is a title registration fee and a mortgage registration fee, both based on property value
• Property tax adjustments — reimbursing the builder for property taxes they've prepaid for the period after your possession date
• GST, net of any rebate applied or assigned (see above)
• Utility and service connection charges — sometimes included in the purchase price, sometimes billed separately; worth confirming which
• Condo or HOA fees, if applicable — including possible reserve fund contributions and estoppel certificate fees for a condo purchase

Property taxes on new construction

This one catches new-construction buyers more often than almost anything else on this page: your first property tax bill is likely to be based on an assessment of the land only, not the completed home, if your municipality's assessment date fell before construction finished. Once the municipality catches up — inspecting and assessing the completed home — you can expect a supplementary assessment that brings your property tax in line with a completed home, which usually means a real increase from what you were initially billed.

This isn't a penalty or a mistake; it's simply how municipal assessment cycles work when a home is built partway through an assessment period. Budget for it rather than being surprised by it.

First-time buyer programs in Alberta

A few federal programs are worth knowing about if this is your first home. Alberta doesn't currently have its own dedicated provincial down-payment grant program the way some other provinces do, so the relevant programs here are national ones that apply in Alberta same as anywhere else in Canada:

• Home Buyers' Plan (HBP) — lets you withdraw funds from an RRSP toward a first home purchase without immediate tax penalty, provided you repay it over time. The withdrawal limit has been raised over the years, so confirm the current limit rather than assuming an older figure still applies.
• First Home Savings Account (FHSA) — a newer registered account combining features of an RRSP and TFSA specifically for a first home purchase, with its own annual and lifetime contribution limits.
• GST New Housing Rebate — see above; there has been specific federal policy attention on enhancing this rebate for first-time buyers on new construction specifically, which is exactly why the GST section is worth reading in full if this is your first purchase.

Ready to talk to someone about your specific numbers? Get pre-approved with a lender who specializes in new construction, or browse new-construction communities across Edmonton first.