Buying a Presale Condo: Developers, Mortgages, Deposits. What you need to know.

 First-time homebuyers and individuals new to the presale or pre-construction condo market typically have many similar questions, all of which are relatively straightforward and easy to answer. 

Buying a Presale Condo: Developers, Mortgages, Deposits. What you need to know.

Once you’ve taken in the information below, you’ll know exactly how to buy a presale condo. The only thing left to do will be to find the new development that’s right for you. Here’s how to buy a presale property.

What is a PreSale Condo?

Presale condos are brought to the market by a developer before the units are built. Buyers can choose to put money down on presales and own the rights to a future home. Buyers still eventually pay the condos’ full price, but until the property is completed, a home loan isn’t needed. This gives buyers the opportunity to leverage their initial investment, should the market rise while the presale is being built.

Deposits, Trusts and Deposit Schedules

The most frequently asked questions about presale condos are surrounding deposits. When purchasing a presale, the first step is to place a deposit down on the property. Typically, there is a small initial deposit due at the time of writing an offer, followed by a 5% to 10% deposit on the agreed purchase price due after a rescission period (more on that next). From here, presale condo deposits are scheduled to be made over a specified period of time, with more large payments being due between your first payment and the date of completion. Here’s a look at a hypothetical deposit schedule for presale condos. Remember that every presale contract is different, so this is just an example of a deposit schedule.

-June 1, 2021: You find the perfect presale condo and put down $10,000 upon writing your offer.

-June 8, 2021: After a 7-day rescission period, the remaining 10% of the purchase price is due.

-June 1, 2022: An additional 5% of the purchase price is due.

-December 1, 2022: An additional 5% of the purchase price is due.

At this point, you’ll have a 20% down payment made on the purchase price of your condo, which is relatively common in today’s market. Once the building is complete, you’ll be ready to secure a mortgage and move into your new home. Deposits are held in a trust account, and developers won’t gain access to the funds until construction is complete. Before we move onto how mortgages work with presale condos, let’s review rescission periods.

Buying a Presale Condo: Developers, Mortgages, Deposits. What you need to know.

Rescission or Cooling Off period.

A rescission period is put in place to protect buyers and give them a period of time to cancel the contract should they have a change of heart. Two things must occur for this period to begin - the purchaser must sign a form acknowledging they’ve read the Disclosure Agreement, and the purchase of sale must be signed and legally binding.

Once those two agreements have been completed, the rescission period officially begins. The length of this period varies by province, with British Columbia having a 7-day window for buyers to rescind on a deal, and Ontario having a 10-day rescission period, or “cooling off” period, as it’s often called.


While you’ll likely need preapproval if you’re buying a presale condo, you won’t need to secure or start paying a mortgage until your property is fully built, with your mortgage loan payments beginning upon final closing. This is when the building is officially registered with your city and when you get the title to your condo.

When it comes to interest rates, you can likely lock in a rate if you’re purchasing a presale condo that will be completed in less than two years. Speak to your bank or mortgage broker and request a commitment letter to lock in rates if you’re trying to secure a mortgage at today’s rates.


Your building’s developer will play a massive role in your presale experience. Developers can delay completion dates, offer amenities like parking and storage space, or even cancel projects entirely in worst-case scenarios. It’s critical that you research the developer extensively and only purchase a presale condo from a company you trust.

If you’re looking for information on developers and new projects in your area, start searching for new developments on this website. 
 You can search by city, or development name to learn about exciting new presale opportunities.

Buying a Presale Condo: Developers, Mortgages, Deposits. What you need to know.


Interest in presale properties is high in many major Canadian cities. Many homeowners are interested in selling in a few years but are interested in investing in a property today. Prebuilds also offer the opportunity for new homebuyers to leverage their initial deposit, which has proven to be highly profitable for many investors in the past. These investment opportunities, mixed with the ease of living that comes from moving into a brand new condo and extended warranty insurance, make presale condos a desirable option for many homebuyers.


The most considerable risk of buying a presale condo is simple: you don’t know what the market is going to look like when your condo is completed. Of course, not knowing what the market is going to do is a risk associated with any investment. If you’re financially prepared for worst-case scenarios and do your research on the area, market, and developer you’re working with, there’s a good chance that the potential benefits of purchasing a prebuild condo outweigh the potential pitfalls.

Hopefully this helps you understand the process of buying a presale condo and what steps need to be taken to secure yourself a prebuild. Start searching for new developments now.
Buying a Presale Condo: Developers, Mortgages, Deposits. What you need to know.

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