The Secret Weapon to Keeping Your Alberta Home Build On Budget? A Well-Planned Draw Schedule.
Renee Huse, founder of Spire Mortgage Team in Alberta, has seen far too many hopeful homebuilders run into avoidable budget issues—simply because their draw schedule wasn’t planned well from the start.
If you're building a home in Alberta, you already know the numbers can shift faster than a Chinook wind. Lumber prices, labour delays, permits—so much is out of your control. But how and when your construction mortgage funds are released? That’s a lever you can plan around.
Let’s break it down and show you why your draw schedule might be the most important blueprint you’ll create.
What we’ll cover:
- What is a draw mortgage schedule?
- Why Alberta builds often go over budget
- Real case study: Red Deer acreage build
- How to structure a smart draw schedule
- What lenders look for in your draw plan
- When to start talking about your draw schedule
- Glossary: construction mortgage terms
- FAQs about draw mortgages in Alberta
What is a draw mortgage schedule?
In a construction mortgage, your lender doesn't hand you the full loan amount upfront. Instead, they release funds in stages—called “draws”—as your build hits certain milestones. Think of it like turning on a tap a little at a time, not opening the firehose.
The typical draw stages in Alberta look like this:
- Draw 1 – Land purchase or pre-construction site prep
- Draw 2 – Foundation complete
- Draw 3 – Lock-up (framing, windows, exterior doors)
- Draw 4 – Interior finishing
- Draw 5 – Completion
Each draw requires an inspection or progress report from an appraiser or lender rep. Then funds are released to pay trades, cover invoices, and keep the project moving.
Why Alberta builds often go over budget
The two biggest culprits we see? Cash flow gaps and timing mismatches.
Let’s say your framer needs $40,000 when lock-up finishes. But your lender won’t release the next draw until the appraisal clears—which takes 7 business days. If you didn’t plan a buffer, that’s a week of scrambling, borrowing, or putting trades on hold.
And with Alberta’s seasonal build cycle, even small delays can snowball into big budget problems if they push your timeline into colder months or rate expiry windows.
Real Alberta Case Study: Red Deer acreage build
Clients: A young couple from Red Deer building a bungalow on family land.
Budget: $750,000 total project cost
Mortgage Type: Insured construction mortgage at 3.99%
Timeline: 8-month build, 5 draws planned
They came to us after their initial broker left them in the dark on draw timing. We mapped out a better-fit schedule that lined up with their builder’s invoices.
| Draw | Stage | Amount | Timing | Why It Worked |
|---|---|---|---|---|
| 1 | Land + prep | $100,000 | Day 1 | Covered permits, grading, and deposit |
| 2 | Foundation | $150,000 | Month 1 | Timed before the concrete invoice hit |
| 3 | Lock-up | $200,000 | Month 3 | Matched framing, windows, doors |
| 4 | Interior drywall | $200,000 | Month 6 | Covered cabinetry, paint, flooring |
| 5 | Completion | $100,000 | Month 8 | Final finishes and occupancy |
This structure helped them avoid over $12,000 in interest charges from using a line of credit. Their interest-only draw payments averaged just $1,000/month during construction.
How to structure a smart draw schedule
Start early—with your builder, broker, and lawyer at the same table. Build a timeline with:
- Expected progress milestones
- Invoice due dates
- Draw release timing (5–10 business days)
- Your own emergency buffer
We help map this all out so there are no surprises between the shovels and the keys.
What lenders look for in your draw plan
Lenders want to know your build is organized and viable. They’ll ask for:
- A signed contract with a licensed builder (fixed-price preferred)
- A line-item budget
- Timelines for each draw
- 10–15% contingency for cost overruns
- Builder credentials, liability insurance
We make sure your file is complete and clean—before anything goes to the lender.
When to start talking about your draw schedule
The sooner the better. Talk to us:
- Before you submit permits
- Before you make major deposits
- As soon as your builder is chosen
Waiting too long can back you into a corner. A smart draw plan is like scaffolding—it supports the whole build.
Glossary: construction mortgage terms
Draw Schedule: A pre-agreed plan outlining when mortgage funds are released during construction.
Progress Inspection: A report from an appraiser confirming a stage is complete before funds are released.
Lock-Up: The stage where your home is fully enclosed—framed, roofed, and secure.
Holdback: The 10% reserve lenders hold from each draw to protect against unpaid contractors (liens).
Interest-Only Payments: You only pay interest on the money you’ve drawn, not the full mortgage.
Completion Mortgage: A mortgage where all funds are advanced at the very end, after construction is finished.
Cost-to-Complete: How much is still required to finish the build, according to the lender.
Builder’s Lien: A legal claim a subcontractor can file if they aren’t paid—can delay draws.
FAQs
[FAQ] Do I need to own the land first to get a draw mortgage in Alberta?
Not always. Some lenders let you use the first draw to buy the land. Others require you to own it. We can work with both.
FAQs
Do I need to own the land first to get a draw mortgage in Alberta?
Not always. Some lenders let you use the first draw to buy the land. Others require you to already own it. We can work with both scenarios and find the lender that fits your situation.
How long does it take to get a draw released?
Typically 5–10 business days from inspection to deposit. Always build in a time buffer so your trades aren't left waiting.
What happens if my build goes over budget?
You’ll need to pay the overage yourself or potentially requalify for a higher mortgage—if your income and equity allow it. That’s why we recommend including a 10–15% contingency up front.
Can I change my draw schedule mid-build?
Sometimes, but it depends on your lender. Revisions often require re-approval and updated inspections. It’s better to plan with flexibility in advance.
Will I pay my full mortgage during the build?
No. During construction, you're typically only paying interest on the funds that have been drawn. Full principal and interest payments begin once the home is complete and the mortgage converts to its final form.
Construction mortgages can feel overwhelming—but they don’t have to. A smart draw schedule isn’t just paperwork. It’s your lifeline when the invoices start rolling in.
Give us a call or fill out an application at this link: https://spiremortgage.ca/apply-now and our team will get in touch with you to start building a plan that suits you.
