Using Canada’s Purchase Plus Improvement Mortgage Program to Finance a New Kitchen

The Purchase Plus Improvement (PPI) mortgage program in Canada is a valuable financing option for homebuyers who want to purchase a property and fund renovations within one mortgage. For buyers interested in upgrading an outdated or inefficient kitchen, the PPI mortgage makes it possible to integrate kitchen renovations into the property purchase, providing a streamlined approach to financing a dream kitchen from day one.

This program is ideal for Canadian buyers who find a home with potential but want a modern, functional kitchen suited to their lifestyle.

How the Purchase Plus Improvement Program Works in Canada

The Purchase Plus Improvement mortgage allows Canadian homebuyers to borrow additional funds beyond the purchase price to fund renovations, typically up to 10-20% of the “as-improved” value, with specific caps varying by lender. Here’s how this process works when it’s used for a kitchen renovation:

Find a Home and Estimate Kitchen Renovation Costs

The buyer selects a home and plans the desired kitchen upgrades. For example, if the home costs $500,000 and the buyer wants to allocate $40,000 to kitchen improvements, these additional funds can be folded into the mortgage through the PPI program.

Obtain “As-Improved” Value from an Appraiser

The buyer works with a lender to get the property’s projected “as-improved” value, which factors in the estimated increase in value from the kitchen renovation. This helps the lender determine how much additional funding they can provide.

Submit Kitchen Renovation Quotes

The buyer provides detailed quotes for the kitchen work, including materials, labor, and any necessary appliances or finishes. These quotes should be submitted to the lender for approval of the improvement funds. MCK Kitchen & Bath provides free kitchen design quotes with no obligation. Contact us here.

Close the Mortgage with Additional Renovation Funds

Once approved, the mortgage closes, with the renovation funds held in trust by the lender until the kitchen work is complete.

Complete Kitchen Renovations

After closing, the buyer proceeds with the kitchen renovations, typically required within 90 to 120 days. The lender inspects and verifies the renovation completion before releasing the remaining funds.

Types of Kitchen Renovations Eligible Under the PPI Program

The PPI program supports a range of kitchen upgrades to enhance both functionality and appeal. Eligible improvements typically include:

Cabinetry and Countertop Upgrades

Replacing dated cabinetry with modern, high-quality options can improve storage and enhance the kitchen’s style, while new countertops provide a durable, visually appealing surface. Some examples can be found here Project Gallery

Appliance Upgrades

Many buyers use the PPI program to install energy-efficient appliances, which are both environmentally friendly and can lower utility bills.

Flooring and Lighting

Updated flooring can be more durable and add a fresh look, while modern lighting solutions brighten the space and improve safety and aesthetics.

Backsplash and Finishes

New backsplashes, faucets, and other finishes are often included, adding personality and polish to the kitchen without requiring major structural changes.

Each improvement should contribute to the kitchen’s value, with a focus on practical and visual upgrades.

Benefits of Using the PPI Program for a New Kitchen

Affordable Kitchen Financing

Including the kitchen renovation in the mortgage means buyers avoid high-interest personal loans or credit, making the process more affordable.

Convenience of a Single Mortgage Payment

The PPI program wraps purchase and renovation costs into one monthly payment, simplifying budgeting and debt tracking.

Enhanced Property Value

Kitchen upgrades often add significant value, increasing the home’s resale potential if the buyer chooses to sell later.

Create a Functional and Stylish Kitchen from Day One

The PPI mortgage allows buyers to customize their kitchen to fit their needs immediately after purchasing the home, making it move-in ready and minimizing disruption.

Important Considerations for Canadian Buyers

Canadian buyers looking to use the PPI mortgage program for a kitchen renovation should be aware of these key points:

Accurate Estimates are Required

Buyers must provide detailed quotes for kitchen renovations from licensed contractors. Proper planning helps prevent delays in funding approval.

Renovation Completion Timeline

Most lenders set a strict deadline for completing renovations, typically within 90 to 120 days post-purchase. Buyers should confirm this timeframe with their lender to ensure they can meet the deadline.

Lender Variations

PPI program terms can vary between Canadian lenders, so it’s essential to compare options to find one that aligns with the buyer’s budget and renovation plans.

Loan Qualification Requirements

Buyers must meet specific credit and income requirements, which can vary based on the lender and the additional renovation funds requested.

Is the Purchase Plus Improvement Program Right for Your Kitchen Renovation?

For Canadians looking to buy a home and immediately transform the kitchen, the Purchase Plus Improvement mortgage program provides the financial support needed to customize this critical space from the start. By financing both the home purchase and kitchen upgrades within a single mortgage, buyers can create a stylish, functional kitchen while keeping payments manageable.

The PPI program makes it easier to invest in a kitchen that suits your lifestyle and enhances your home’s long-term value. As with any mortgage product, consult with a lender to ensure the program aligns with your financial goals and renovation plans, and enjoy building your ideal kitchen as part of your new home purchase.

In Canada, there are three main providers of purchase plus improvements programs. Typically, as the home buyer, you won’t have any interaction with these providers unless your down payment is less than 20%.

CMHC Improvement 

CMHC Improvement is an option for consumers who are purchasing an existing house as well as those looking to build a new house.

To learn more about the CMHC Improvement program, click here.

Canada Guaranty Purchase Advantage Plus

Purchase Advantage Plus is designed to help Canadian consumers purchase a home and add value through renovations.

To learn more about the Canada Guaranty Purchase Advantage Plus program, click here.

Sagen Purchase Plus Improvements Program

Another option for homebuyers who wish to purchase a home while adding value immediately through improvements.

To learn more about the Sagen Purchase Plus Improvements Program, click here.