A custom home should meet your needs as they are today, but also anticipate what they may look like five or ten years from now. Your household may change. Children grow up. Working from home may become part of your routine or disappear altogether. A parent may eventually need to live under the same roof.
Anticipating these changes during the design phase can help you avoid having to adapt your home only a few years after construction. This is where our team’s experience can help guide your thinking. With more than 60 single-family home projects completed, we know how to help you define your needs and design a home that can evolve with you.
A construction mortgage is financing designed for a new home that is built in stages on land owned by the homeowner.
Unlike a traditional mortgage used to purchase an already-built home, the funds are not provided all at once. Instead, they are released progressively based on the progress of construction and following inspections required by the financial institution.
Financing must therefore be planned around the realities of the construction process: payments to the contractor, construction stages, inspections and disbursement timelines all need to align.
How does a construction loan work?
Progressive disbursements based on construction progress
The principle is simple: the financial institution releases funds as construction progresses.
Depending on the lender, financing may include three or more disbursements. Common milestones include:
Completed and backfilled foundations
Building enclosure, with exterior finishes and interior walls sufficiently advanced
Completion of construction
For a custom home project, we generally recommend planning for five or six disbursements when the financial institution allows it. More frequent disbursements can make cash flow easier to manage and better align with the payment schedule outlined in the construction contract.
Terms vary from one lender to another. Some allow additional disbursements at no extra cost, while others may charge additional inspection fees. It is therefore important to discuss this structure with your financial institution before construction begins.
The value of the land can be used toward the down payment
When the homeowner already owns the land, its equity can generally be taken into account as part of the financing structure.
Every homeowner’s situation is different, so the financing structure should be established with the lender or mortgage broker.
Inspections determine when funds are disbursed
Before each disbursement, the financial institution must verify the progress of construction to confirm that the value of the building corresponds to the expected percentage of completion.
The homeowner must therefore closely monitor construction progress and request inspections at the appropriate time.
You should also account for the time between requesting an inspection and receiving the funds. Depending on the financial institution and the time of year, the process can take anywhere from a few days to approximately 10 days. Careful planning is therefore essential to prevent a disbursement from arriving after a payment to the contractor is due.
A portion of the funds will be held back until the end of the project
Financial institutions require a holdback on disbursements to protect themselves against risks such as legal construction hypothecs.
A 15% holdback is common, although the exact terms vary depending on the lender and type of financing. The funds being held back are released after construction is completed and once the financial institution’s requirements have been met.
It is therefore important to understand from the outset how much money will actually be available at each stage of construction.
During construction, you generally pay interest on the amounts already disbursed
During the construction period, interest is calculated on the amounts that have already been released rather than on the full amount of approved financing.
Once the home is completed and the financing is converted, regular mortgage payments begin according to the terms agreed upon with the lender.
Plan for financial flexibility
One of the most important things to understand is that the mortgage disbursement schedule does not necessarily align with the contractor’s payment schedule.
These two aspects must therefore be planned together.
It is essential to have additional funds available to meet the payment deadlines in the construction contract while waiting for the next mortgage disbursement.
You should also plan for contingencies, unexpected expenses, choices that evolve during the project and upgrades requested during construction. A reserve of 10% to 15% of the project cost is generally a prudent margin, depending on the nature of the project and what is already included in the contract.
You must also account for the amounts that will be held back by the financial institution.
In some cases, a line of credit, temporary loan or bridge loan can help manage this transition period. However, the financing structure should be established with the professional assisting you with your financing.
Funds required before the first disbursements
At Écohabitations Boréales, a 5% deposit is required when the contract is signed, followed by 10% when orders are placed.
This means that 15% of the project cost, before management fees and taxes, must be available before construction begins.
These deposits provide the working capital required to launch and maintain the project. They are declared and protected under the GCR warranty plan.
The steps involved in a construction mortgage
1. Obtain a pre-approval
The first step is to understand your borrowing capacity and establish a realistic budget.
A pre-approval helps determine how much you can reasonably invest in your project before choosing a lot or finalizing the house plans.
This step helps prevent you from developing a project that exceeds your financial capacity and allows you to make decisions about the lot, square footage, materials and finishes with a clearer understanding of your available budget.
2. Prepare a strong financing application
Obtaining a construction mortgage requires a more detailed application than a standard mortgage pre-approval.
The lender will want to assess your financial situation, the land, plans and specifications, construction budget, projected value of the home and the contractor’s estimate. The anticipated construction schedule may also be part of the application.
For a custom home, working with an experienced construction company such as Écohabitations Boréales allows you to present a well-structured project with a detailed estimate and a clear understanding of the costs associated with each stage.
Our experience in custom home construction and our relationships with various financing professionals can also facilitate communication between the client, lender and construction team.
3. Finalize financing before construction begins
Once the application has been approved, the financing terms are finalized and the documents are prepared for signing before a notary.
Before construction begins, it is important to clearly understand:
The number of planned disbursements
Inspection timelines
Amounts that will be held back
The cash required between disbursements
Costs that are not covered by the mortgage or the contractor’s agreement
Understanding these aspects of your financing helps prevent unpleasant surprises once construction is underway.
4. Manage disbursements during construction
Once financing is in place, construction can begin.
Coordination between construction progress, inspections and the release of funds then becomes essential. Requesting an inspection too early or too late can create a gap between payments due to the contractor and the funds available.
At Écohabitations Boréales, we are accustomed to working with this type of financing structure and can help our clients plan the different disbursement stages.
5. Convert the loan into a traditional mortgage
At the end of construction, once the financial institution’s requirements have been met, the construction loan is converted into traditional mortgage financing.
Regular payments are then established according to the loan terms negotiated with your financial institution.
Practical tips for planning your financing
Understand what is included in the estimates
The cost of a home does not necessarily represent all expenses associated with the project.
Items such as permits, soil testing, certain excavation and landscaping work, utility connections or technical adjustments related to the lot may be added to the construction cost. Whether these items are included varies depending on the project and contractor.
At Écohabitations Boréales, we provide a detailed construction estimate outlining budget allowances for items such as plumbing, cabinetry and foundations, along with the project’s inclusions and exclusions.
The earlier these elements are clarified, the more accurately the financing structure can reflect the actual project.
Let the project and financing evolve together
With a custom home, decisions naturally evolve throughout the design process and even during construction. The financing must be able to evolve along with them.
Developing the design, cost estimate and financial plan in parallel helps avoid last-minute adjustments, which are often more expensive and stressful.
This is one of the reasons we recommend involving our team from the earliest stages of the project. By reviewing and adjusting the estimate with the client and designer, it becomes easier to find the right balance between the project vision and the available budget.
Track the actual cost of the project as it evolves
Between the initial budget and the completion of a custom home, many decisions can affect the project cost, including material selections, modifications, additions, savings in certain areas and unexpected expenses.
To give our clients a clear picture of their financial position, Écohabitations Boréales updates the project’s detailed budget every 6 to 8 weeks.
This process provides a clear breakdown of:
Amounts already paid
Committed or incurred costs
Expenses still to come
Cost increases and savings resulting from changes to the project
The impact of these changes on the home’s projected total cost
This allows clients to understand not only where the project currently stands, but also where it is heading financially.
This tracking tool helps clients make more informed decisions during construction and adjust certain choices when necessary rather than discovering the difference between the initial budget and final cost at the end of the project.
For a custom home, where decisions naturally evolve throughout construction, this level of visibility is a valuable management tool and an important part of maintaining control over the budget.
Understand the particularities of building on your own land
Even when the homeowner is not personally carrying out the construction work, some financial institutions may still classify this type of project as an owner-builder project.
In this situation, mortgage disbursements are made directly to the homeowner, who then uses the funds to pay the contractor and other eligible project expenses.
In summary
A construction mortgage is designed around the realities of building a new home in stages. For the project to move forward smoothly, you need to understand how disbursements work, anticipate related costs and maintain sufficient liquidity to bridge the gap between payments to the contractor and the funds available.
For a custom home, financing should not be treated separately from the construction project. The budget, design and financing should evolve together from the earliest stages.
Good preparation helps reduce unexpected issues, improve cash flow management during construction and support better-informed decisions throughout the project.
Are you considering building a custom home on your own land?
At the 2026 Domus Awards Gala hosted by the APCHQ Montréal Métropolitain, our Lac Piché project earned top honours in the Single-Family or Townhouse Unit – Standard ($950,000 to under $2 million) category.
Designed as a retreat in the heart of the Laurentians by Biophile Architecture, this 2,400 sq. ft. secondary residence is LEED Silver certified and Novoclimat certified. It was envisioned as the future retirement home of its owners.
The architectural concept, known as The Fragmented House, unfolds through a series of volumes that follow the natural contours of the site and open onto the lake and surrounding forest of Sainte-Marguerite-du-Lac-Masson.
Beyond its performance, architecture and construction quality, this project is above all the result of an exceptional team effort.
Thank you to Maude, our project manager, for her outstanding work and close collaboration with the clients throughout the project.
Thank you to Silke and Camille for your dedication and passion every day.
Thank you to Stéfanie for your rigor and reassuring presence.
Thank you to our carpenters, subcontractors, professionals and all our partners for their contribution to this achievement.
And most importantly, thank you to our clients for their trust. It is a privilege to bring such meaningful projects to life.
This Domus Award is a reflection of true teamwork.
Écohabitations Boréales is proud to announce its nomination at the 2026 Domus Awards, a major recognition within Quebec’s residential construction industry.
This year the company stands out with several nominated projects as well as a special nomination in sustainable development. This recognition directly reflects our commitment to responsible high quality construction.
A major recognition for sustainable housing
Organized by the APCHQ the Domus Awards highlight the most outstanding residential projects in the industry.
Being named a finalist in multiple categories confirms one thing: Écohabitations Boréales’ approach focused on performance sustainability and design meets the highest industry standards.
Two nominated projects in the single-family home category
In the “Single-family or townhouse unit” category Écohabitations Boréales stands out with two projects each competing in a different subcategory.
Lac Piché secondary residence
Subcategory: Standard ($950,000 to under $2M)
This project perfectly illustrates the balance between design functionality and integration with the natural environment.
Located in a peaceful setting this secondary residence was designed to:
A factory-built home, also called a prefabricated or modular home, is designed using standardized models manufactured in a factory, then transported and assembled on the building site. It is usually possible to adapt and customize the available models. Many manufacturers offer the option to visit model homes on display, which can be reassuring for future homeowners. The structure is produced in a controlled environment and then delivered to the construction site in modules to be installed on a foundation that has been prepared in advance.
What Is a Custom-Built Home?
A custom-built home constructed on-site offers complete design freedom. It is planned and designed around your family by considering factors such as your lifestyle, your lot and its orientation, your current and future needs, your budget priorities and your architectural and functional preferences.
Every detail is integrated from the design stage. Your home is therefore unique and perfectly suited to its environment. This construction approach also makes it easier to incorporate the requirements needed to obtain certifications such as LEED or Novoclimat, since performance standards are integrated directly into the plans and construction methods.
The Limitations of Prefabricated Models
The Total Cost Can Be Difficult to Estimate
Factory-built home manufacturers often advertise an attractive base price. However, this price usually covers only the structure. Several essential elements must be budgeted separately and handled by different suppliers or subcontractors, including:
clearing and access road
excavation and final grading of the lot
foundation
municipal connections or installation of independent systems (septic system, well)
electrical connection
transport and lifting of the modules
interior finishes (depending on the selected level)
balconies terraces stairs gutters
basement finishing
These steps require coordination, quote validation and supervision. Without structured support, the overall budget can quickly exceed the initial projections.
Customization Is Often More Limited Than Expected
Catalogues offer options but always within a predefined framework. Modular transport creates certain technical constraints that must be respected. Modifying room layouts, adjusting dimensions, repositioning windows or rethinking the orientation of living spaces can become complex or even costly. As a result, the actual flexibility is sometimes more limited than anticipated.
In addition, models are often presented on flat lots. In the Laurentians, however, the reality is often different: slopes, elevation changes, limited access and natural constraints are part of the landscape. When the topography requires the addition of a walkout level or major foundation adjustments, integrating a pre-established model becomes more complex.
What Are the Advantages of an On-Site Custom-Built Home Compared to a Factory-Built Home?
Building on-site allows for a comprehensive and integrated approach. A custom-built home is designed around your lifestyle: every space is planned to be functional coherent and durable.
The design also takes the building lot into account in order to:
maximize views and natural light
optimize solar orientation
reduce excavation and site preparation costs
promote harmonious integration with the site
Contrary to common belief, a custom-built home often allows for better optimization of space and budget. By designing the home around your real priorities, you avoid paying for unnecessary square footage or features. Investments are directed toward what truly improves comfort functionality and durability. This planning also reduces the risk of costly renovations a few years later. Overall comfort and quality of life are higher when the design is carefully considered from the start: window orientation natural light insulation quality ventilation and energy performance are all integrated into the project.
Novoclimat and LEED programs integrate more naturally into a custom-built home. The result is a high-performance home that is comfortable to live in today and durable over the long term.
Factory-Built Home with Project Management by Écohabitations Boréales
The Key Role of Écohabitations Boréales in Your Home Project
Whether you choose a factory-built home or a custom-built home constructed on-site, Écohabitations Boréales ensures rigorous coordination of your project. You can rely on our team to:
understand and clearly communicate your needs to the designer
provide detailed estimates during the design phase to ensure budget alignment
recommend and coordinate the required professionals: technologists architects surveyors soil engineers structural engineers designers
plan and supervise the entire construction site
ensure close budget monitoring and consistent quality control
Choosing Écohabitations Boréales means relying on more than 17 years of experience, zero GCR claims and a solid reputation established in the region. Deeply rooted in its territory, our team understands the realities of the Quebec climate, the constraints specific to lots in the Laurentians and Lanaudière and the construction standards currently in force. This knowledge of the local context, combined with a transparent and structured approach, allows every project to be carried out with rigour from beginning to end.
Custom-Built Home or Factory-Built Home: How to Make the Right Choice for Your Family?
Before making a decision, ask yourself the following questions:
Do you have the technical skills required to supervise a construction site and coordinate several subcontractors?
Are you comfortable managing quotes schedules and unexpected issues?
How important is professional guidance to you?
The right choice depends as much on your priorities as on the level of guidance you want.
Conclusion
A factory-built home may suit certain projects, particularly when the lot is simple and the buyer does not wish to undertake a full design process. Whether you choose a factory-built home or a custom-built home constructed on-site, the key factor remains the overall control of the project. This is precisely where Écohabitations Boréales makes the difference.
