Everything you need to know about self-construction financing in Quebec
- coraliefortin076
- Jun 12
- 5 min read
Updated: 6 hours ago
Building your own house, cottage, or garage is a dream come true, with your own criteria, tastes, and priorities. But it also means embarking on an adventure that requires solid preparation, particularly when it comes to financing.
At Plan Maison Québec, we support many Quebecers each year in their self-build projects by providing them with personalized plans that comply with municipal requirements and are optimized for each individual's budget. In this comprehensive guide, you'll discover all the essential information you need to fully understand and successfully finance your self-build project.
Why choose self-construction?
Self-build projects are attracting more and more Quebecers seeking independence, customization, and cost savings. By carrying out certain tasks yourself or directly managing the construction site, you can reduce your construction costs while designing a space that reflects your personality.
However, this type of project also involves taking on numerous responsibilities:
managing subcontractors
keeping to a budget
coordinating the various stages
obtaining suitable financing.
It's not enough to have a vision; you also need to convince your lender that your project is structured, serious, and financially viable.
This is where Plan Maison Québec comes in. In addition to providing you with professional plans tailored to your needs and compliant with the standards of the Quebec Building Code, we support you with concrete advice to facilitate your dealings with financial institutions.
Understanding the specificities of self-build financing
Financing a self-build project differs radically from financing a new or existing home. In most cases, financial institutions like Desjardins do not offer a single amount released at the time of purchase. Instead, financing is provided in installments (or disbursements), which are paid out as the work progresses.
Each phase is conditional upon a physical assessment of the construction site conducted by a certified appraiser. This assessment guarantees the bank that the funds are being used in accordance with the plan presented. This adds a level of security for the lender, but also places some pressure on the self-builder, who must progress the work according to a realistic and documented schedule.
Plan Maison Québec helps you present a well-structured project from the outset, which greatly facilitates the acceptance of your financing application.
The stages of self-construction financing
1. Project development and initial calculations
Before considering a bank, you need to have a clear idea of your project: house dimensions, construction type (wood frame, concrete, etc.), number of floors, lot location, architectural style, etc. These details will determine the overall cost and, therefore, the required financing.
At this stage, contacting Plan Maison Québec is essential. Our custom construction plans will not only allow you to visualize your future building, but also allow you to obtain more accurate cost estimates from your contractors or suppliers.
2. Preparation of the financing file
This is probably the most demanding step in the process. For your financial institution to consider your self-build mortgage application, you will need to submit a complete, structured, and credible file.
This file includes:
Certified construction plans,
Detailed bids or estimates from your contractors or suppliers for all components (excavation, foundation, framing, electrical, etc.),
Proof of purchase or offer to purchase the land,
A building permit issued by the municipality,
A site plan produced by a land surveyor,
Builder's insurance valid for the entire duration of the work.
In addition to the technical documents, the institution will also require your financial information: your last two notices of assessment, a recent pay stub, a list of your debts and assets, as well as external investment statements, if applicable.
This step may seem tedious, but it is crucial. At Plan Maison Québec, we can advise you on putting together this file by helping you provide compliant and professional plans, often required to obtain the green light from the bank.
3. Project evaluation
Once your application is submitted, your project will be evaluated by a certified appraiser commissioned by the bank. This professional will analyze the consistency between the estimated costs, the quality of the plans, the future market value of the property, and your ability to manage the project.
This appraisal report is essential: if it confirms the project's viability, your financing application has a good chance of being accepted.
4. Approval and conditions of financing
Once the project is approved, the financial institution will offer you a mortgage loan tailored to your situation. This loan will specify the amount granted, the disbursement structure, the conditions for releasing the funds, the holdbacks (often 15% per disbursement), and the repayment terms.
It is important to fully understand all the details of this agreement before signing. Don't hesitate to ask questions and seek professional advice to validate your decisions.
5. Progress of work and expenses
As construction progresses, you can request loan releases. Each phase requires a site inspection to assess the percentage of work completed. This requires you to adhere to a consistent schedule and rigorously document your progress.
Plan Maison Québec recommends integrating these deadlines directly into your construction schedule to avoid financing delays that could compromise the smooth running of the project.
6. Final Inspection and Loan Closing
Once the work is completed, a final inspection validates the project's compliance. The remaining balance of the financing is then paid to you (including the 15% retention, if applicable), and you then begin regular repayments of your mortgage.
Realistic estimation of construction costs
A poorly budgeted project is one of the leading causes of failure in self-build projects. It is therefore imperative to have a realistic and detailed estimate for each step: excavation, foundation, structure, insulation, roofing, electrical, plumbing, finishing, etc.
At Plan Maison Québec, we provide detailed plans that allow you to better anticipate the costs of each item. We also recommend building in a 10 to 15% safety margin for unforeseen events.
Financing your project: what options are available?
There are a variety of financing options for self-build projects. You can combine several sources:
Your personal savings for the down payment,
A graduated mortgage loan offered by an institution like Desjardins,
A home equity line of credit for more flexibility,
Grants or tax credits related to green building or energy renovations (such as the RénoVert credit, in some cases).
It's also possible to sell an existing property to finance a new self-build project. This strategy is increasingly popular, provided you manage the transition between the two projects well.
The importance of planning and support
Building your own home requires not only courage and determination, but also the ability to surround yourself with the right people. You'll need professional advice on several levels: plan design, engineering, compliance with standards, site coordination, and, of course, financial management.
By working with Plan Maison Québec, you benefit from the expertise of a team that understands the challenges of the field and will help you lay the right foundations, both literally and figuratively.
Conclusion: self-construction financing in Quebec
The self-construction financing in Quebec is an ambitious undertaking, but it's achievable with proper preparation and the right tools. Financing is the cornerstone: it allows you to move from planning to completion. With quality plans, a solid application, and a realistic budget strategy, you'll have the best possible chance of success.
At Plan Maison Québec, we pride ourselves on supporting self-builders every step of the way. From personalized design to budget planning assistance, our mission is to turn your vision into reality.
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