If you've been shopping for a condo in Vancouver, Burnaby, or Richmond over the last few years, you've almost certainly encountered presale projects. The pitch is appealing: lock in today's price, move in years from now. But the financing side of a presale purchase works almost nothing like buying a resale condo, and several buyers find out too late that what they arranged at signing no longer works by the time they get their completion notice.
Your Mortgage Isn't Arranged When You Sign the Contract
This is the part that surprises most first-time presale buyers. When you sign a presale contract and hand over your deposit, you are not arranging a mortgage. You are making a contractual commitment to purchase a property that doesn't exist yet, or isn't finished yet. The actual mortgage gets arranged close to completion, which could be one, two, three, or even four years away depending on the project.
In the meantime, your deposits are typically structured in stages. A common structure in Metro Vancouver presale projects might look like this:
- An initial deposit at signing, often around 5% of the purchase price
- One or more additional deposit instalments over the following months, bringing total deposits held in trust to somewhere in the 15% to 20% range by the time construction begins in earnest
- The remaining balance paid through your mortgage at completion
Those deposit funds sit in a lawyer's trust account, not with the developer, and BC has rules around how they can be held. But the key financing point is this: the mortgage lender doesn't enter the picture in a meaningful way until the developer issues a completion notice, usually 60 to 90 days before the keys change hands.
What Can Change Between Signing and Completion
Quite a lot, as it turns out. This is where presale financing carries real risk that a standard resale purchase doesn't.
Your financial picture may look different
Lenders qualify you based on your income, debts, and credit at the time of the mortgage application, not at the time you signed the presale contract. If your income has dropped, you've taken on new debt, or your credit profile has shifted, you may qualify for less than you expected. The stress test still applies: you need to qualify at the higher of your contract rate plus 2%, or 5.25%. That threshold is the same whether you're buying resale or presale.
The property's appraised value may not match the contract price
Lenders lend against the lower of the purchase price or appraised value. If the market has softened between when you signed and when the project completes, an appraisal may come in below your contract price. That gap becomes your problem. You either need to cover it with additional funds at closing or renegotiate, and developers are rarely eager to negotiate down on presales. This is one of the more serious risks in a shifting rate and price environment, and Metro Vancouver has seen both directions of this play out in different project cycles.
Rate holds don't really apply the same way
A standard rate hold from a lender covers you for 90 to 120 days on a resale purchase. On a presale with a two-year timeline, that hold does nothing for your completion. Some lenders offer extended rate commitments for presale completions, but the terms vary considerably and typically come with conditions. The rate environment at completion is largely what you're working with.
There's also the new-build PTT exemption to factor into your closing cost planning: properties under $750,000 may qualify for a full exemption, with a partial exemption available up to $800,000. Many Vancouver presale condos sit above those thresholds, so it's worth confirming what you'll actually owe before you finalize your cash-to-close number.
Presale financing isn't something to figure out at completion notice time. The project timeline, your financial flexibility, and how lenders treat the specific building all matter, and those details are worth working through with someone who knows the local landscape well before you sign on the dotted line.