What Buyers Should Know About Financing a New Build in Saskatoon

With the resale benchmark price in Saskatoon reaching an all-time high of $435,200 in 2026, and building permits jumping up 76.7% year-over-year, understanding the differences and implications of buying a new build vs. resale has never been more important.

The current state of Saskatoon’s market

Saskatoon is currently in a seller’s market, with inventory at just 1.6 months of supply as of March 2026. For reference, balanced markets are considered 4-6 months of supply. This lack of inventory creates fierce competition for well-priced homes when they do hit the market. This pressure has been pushing buyers to consider more new construction builds for their next homes and builders have noticed. Q1 of 2026 alone saw permits for 1,060 new housing units, with much of that being driven by multi-family construction such as townhomes and apartments.

Financing for a resale home

Purchasing an existing home is the path most buyers are familiar with. It is the traditional home ownership method including sending an offer, having the offer accepted, subjects are removed, financing conditions are met and possession typically follows in 30-90 days.

The key mortgage considerations for this type of sale include:

Rate holds, which are straightforward. Most lenders will offer rate holds of 30-120 days for a resale purchase. This is often enough time to get from accepted offer to possession. Locking in a rate hold at the start of the home buying process can help create a smoother transaction and provide a clearer understanding of future financial commitments.

Financing is often subject to appraisal. With multiple offer situations becoming more common, it is important to understand that lenders will often only provide funds up to the appraised value of the home. If an offer is presented for more than the appraised value, that difference will be required from the buyer’s own funds.

Stress test applies to the approved hold rate plus 2% or 5.25%, whichever is greater. This ensures that the buyer will be able to support payments should the interest rates go up.

Closing costs are predictable. Buyers of resale homes can plan for legal fees, title insurance, home inspections and property tax adjustments as part of the closing costs. There are some exceptions that may come up, but generally these are predictable and expected closing costs.

Financing for a new build

Buying a new build in Saskatoon is a different financing experience, with buyers often entering into a purchase agreement months, or even years, before the expected possession dates. This difference can introduce a number of new considerations that don’t apply to a traditional resale purchase.

There are two types of construction mortgages:

The completion mortgage is the most common when purchasing from a residential builder in Saskatoon. The buyer puts down a deposit at the time of the purchase agreement and the remaining financing is advanced at the time of completion. No mortgage payments are required during the construction phase.

The progress draw mortgage is typically used for self-builds or custom construction, where the buyer is managing the process. Funds are withdrawn in stages when the construction reaches certain milestones with interest being paid on each drawn amount.

Depending on whether the buyer is actively involved in the build or just buying a new build down the road, the mortgages will look different.

Rate holds can be a problem for buyers of new build homes as they are often limited to 120 days maximum. Since a typical new build can take 9 to 18 months to complete, the rate secured at the time of the mortgage approval may have changed substantially by the time the home is completed. Some lenders offer extended rate protection programs for new builds, but these options often come with specific conditions and limitations. It is best if the buyer discusses these options with their professional mortgage broker before signing a builder’s purchase agreement. If the rates rise between the approval and the completion, buyers may face significantly higher monthly payments than anticipated.

Builder delays are common and buyers need to plan for this accordingly. Supply chain issues, labour availability and even permit problems can cause delays in the progress of a home build. Builder contracts typically include clauses that allow for extensions to the possession date. If the buyer is relying on the sale of their home to fund the new build, a careful strategy to ensure proper timing is required. Additionally, bridge financing may have to help fill in any gaps.

GST is required on newly built homes, but not resales. This can be the biggest financial difference between the two options. While there are some federal grants that can help relieve the financial pressure of the GST tax, these are often geared towards specific criteria like first-time home buyers and purchase amounts.

The final appraisal creates a risk as well. The financing appraisal is done at the time of completion, which could be a problem if the market has changed since the approval. If a new build comes in with an appraisal amount lower than the approved financing amount, the buyer may be on the hook for the difference.

Weighing the trade-offs

While neither resale or new build home purchases are inherently better, there are risks and rewards that should be taken into consideration for both. Resale homes often come with established neighbourhoods, larger property sizes, available schools and community involvement that brand new builds in new neighbourhoods may lack. New builds often come with warranties that provide peace of mind for the buyers, but have other risks associated with the purchase process.

Whether purchasing a resale property or buying a brand-new build, understanding the financing process early can help buyers avoid surprises and make more confident decisions. Working with an experienced mortgage broker ensures buyers have a clear strategy in place before signing an offer or builder agreement.

Thinking about a new build or a resale purchase in Saskatoon? Get in touch with our team to talk through your financing options before you sign anything.