Annapolis Valley
Nova Scotia construction mortgage calculator
How a self-build is financed: the total, the lot as your down payment, the four draws, the holdback that delays the last one, the interest while you build, and the payment afterwards.
How does a construction mortgage pay out in Nova Scotia?
In draws against completed stages, not one advance. On a $110,000 lot owned clear and a $420,000 contract with 10% contingency, the $462,000 mortgage releases $69,300 at start, $115,500 at lock-up, $115,500 at drywall and $161,700 at completion, less a 10% builders’ lien holdback kept for 60 days after the work is substantially complete.
Run it on your build
Enter the lot, the contract and the build length. It works as a draw mortgage calculator: each draw, the construction loan interest you carry between them, the holdback, and the payment once the loan converts. The holdback is Nova Scotia law; the rest of the arithmetic is the same anywhere in Canada.
Draw mortgage example, stage by stage
Four draws on the $462,000 example mortgage
- Interest only, on what has been advanced (steps 1–3)
- Final draw, less the $42,000 holdback (step 4)
- Land / start $69,300 released 15% cumulative
- Lock-up $115,500 released 40% cumulative
- Mechanical and drywall $115,500 released 65% cumulative
- Completion $161,700 released 100% cumulative
- Builders’ lien holdback: 10% of the contract, $42,000
- 12-month build in the example
- Converts to a 25-year mortgage at completion
Stages and percentages are an illustration; your lender sets its own. The holdback is released 60 days after substantial performance if no lien is registered. Last verified September 20, 2026.
| Draw | Released | Month | Owing after | Interest a month | Interest to the next draw |
|---|---|---|---|---|---|
| 1. Land / start, 15% Lot owned or purchased, permits issued, foundation poured | $69,300 | 0 | $82,236 | $304.96 | $1,219.83 |
| 2. Lock-up, 40% Framing, roof, windows and exterior doors in; weather-tight | $115,500 | 4 | $197,736 | $733.27 | $2,933.08 |
| 3. Mechanical and drywall, 65% Rough plumbing, electrical and HVAC inspected; insulation and drywall complete | $115,500 | 8 | $313,236 | $1,161.58 | $4,646.33 |
| 4. Completion, 100% Occupancy permit, final inspection, well and septic sign-off, insurance converted | $161,700 | 12 | $474,936 | Converts | None |
| Interest during the build | $8,799.24 | ||||
The completion draw of $161,700 is paid less the $42,000 holdback: $119,700 at completion, the rest once the lien period has run with nothing registered. Your lawyer does the lien search.
The same build, insured and not
A loan over 80% of the project’s cost needs default insurance, and the premium is added to the mortgage. On this example a small amount of cash moves the loan to 80% and removes it. Buying the lot as part of the project, with no land equity, does the opposite.
| Scenario | Construction mortgage | Loan-to-value | Insurance premium | Interest in the build | Payment after |
|---|---|---|---|---|---|
| Lot owned, no cash | $462,000 | 80.77% | $12,936 (2.8%) | $8,799 | $2,615 |
| Lot owned, plus $4,400 of cash | $457,600 | 80% | None | $8,145 | $2,520 |
| Lot bought with the project, minimum down payment$32,200 of cash | $539,800 | 94.37% | $21,592 (4%) | $10,569 | $3,092 |
Go deeper
The detail, if you want it
The builders’ lien holdback
Section 13(2) of Nova Scotia’s Builders’ Lien Act has the owner keep back 10% of the value of work and materials, worked out on the contract price, as security for unpaid subcontractors and suppliers. It is kept for 60 days after the contract is substantially performed and released if no lien has been registered. Lenders build that into the final draw.
First-time owner-builders often miss it, which is why the last month of a build feels short of cash. Budget for it from the start.
How construction loan interest is worked out
During the build you pay interest only, on money advanced, usually monthly: the balance owing times the rate, divided by 12. On the example that is $305 a month after the first draw, $733 after the second and $1,162 after the third, $8,799 over the 12 months.
The estimate assumes the four draws land at even intervals. A fast frame and a slow finish puts more of the balance out earlier and raises it. So does a build that runs long: at 18 months the same example costs $13,199.
The conversion to an ordinary mortgage
At the final draw the loan converts to a standard mortgage and the amortization starts. You were qualified for the full $474,936 before the first draw at the greater of the contract rate plus 2% and 5.25%, so the conversion is not a second approval unless something has changed. The mortgage payment calculator shows that payment at other terms and frequencies, and the affordability calculator the income it needs.
Minimum down matches a purchase, 5% of the first $500,000 and 10% of the remainder (1–2 units), and an insured build needs the as-improved value under $1,500,000.
Why a broker
Licensed, independent, paid by the lender
- Licensed in Nova Scotia Associate broker 3001134, verifiable on the provincial register
- $0 broker fee On a standard residential mortgage the lender pays, not you
- Banks, credit unions, monolines One application, one credit check, placed with the lender that reads your file best
- Every part of the province Bedford office, remote process: Yarmouth to Sydney, the same four steps
Questions people ask
How much cash do I need to start a build if I own the lot?
Often none for the down payment. On a $110,000 lot owned clear with a $420,000 contract and 10% contingency, the project costs $572,000 and the lot is 19.23% of it, so the $462,000 mortgage sits at 80.77% of cost. Over 80% the build needs default insurance: a $12,936 premium here, which $4,400 of cash would remove. The lender’s money still goes in after yours: permits, plans and the first site work are paid before the first draw.
How much interest do I pay during the build?
About $8,799 on the example over a 12-month build at 4.45%, the chartered-bank prime rate, Bank of Canada, 2026-09-30. You pay interest only on money advanced, so it starts near $305 a month after the first draw and reaches $1,162 a month before completion. A longer build or a higher rate moves the figure in proportion.
How is construction loan interest calculated?
Each month the lender charges the balance advanced so far, times the rate, divided by 12. Nothing is charged on money not yet drawn. On the example, $82,236 is owing after the first draw, so a month of interest is $305; after the third draw $313,236 is owing and a month costs $1,162. The calculator adds those months up across the build.
What is the builders’ lien holdback and why does it delay my last draw?
Under section 13(2) of the Nova Scotia Builders’ Lien Act the owner keeps back 10% of the value of work and materials, as security for subcontractors and suppliers, for 60 days after the contract is substantially performed. On a $420,000 contract that is $42,000, so $119,700 of the $161,700 final draw is paid at completion and the rest follows once the period has run with no lien registered.
Does a construction mortgage need default insurance?
When the loan is more than 80% of the project’s cost, yes, on the same premium table as a purchase. The example borrows 80.77% of cost, so a 2.8% premium of $12,936 is added and the mortgage converts at $474,936. With $4,400 more cash the loan is $457,600, exactly 80%, and there is no premium. An insured build also needs a finished value under $1,500,000.
What is the payment once the build converts?
On the $474,936 example over 25 years at 4.45%, about $2,615 a month. You are approved for the full amount before the first draw at the greater of the contract rate plus 2% and 5.25%, a qualifying payment of $3,167 at 6.45%, so the conversion is not a second approval unless something has changed.
Still unsure? Ask me directly.
If your question isn't here, your situation is probably specific. Fifteen minutes on the phone beats reading another page, and nothing is pulled on your credit.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic
Building? The draw schedule is set by the lender.
Send the lot, the budget and the builder, and you get back the draw structure a lender would use, the cash you need to start, and where the holdback will bite, within a business day.
(902) 298-0218 · Monday to Friday, 8:00 am to 10:00 pm Atlantic