Definition
Pre-construction purchase involves signing a purchase agreement on a property that does not yet exist (or is under construction). The buyer typically pays a deposit of 5% to 20% at signing, with the remainder financed at delivery.
The main risk is the **interest rate at delivery**: if you sign today for a delivery 18 to 36 months away, your mortgage will be underwritten at market rates on the delivery date — not current rates. If rates have risen between promise and delivery, your monthly payment will be higher than expected.
Some lenders offer special rate holds for pre-construction (up to 24 months), but these are less standardized. An AMF broker specializing in pre-construction can identify available options depending on the developer and property type. Also, note: in case of project delay or cancellation by the developer, deposit recovery can be complex depending on contract terms.