A construction draw schedule in BC is the plan for how your lender releases the loan in stages as the house goes up, and how that money flows on to your builder. Two rulebooks shape it. Your lender's commitment letter sets the stages and what its inspector must see before each advance. BC's Builders Lien Act then requires whoever pays to hold back 10% of each payment until 55 days after completion. Understanding both is the difference between a smooth build and a site that stops because the next draw has not landed.
How does a construction draw schedule work in BC?
With a draw mortgage, the lender approves a total loan but only advances it as work is completed and verified. Draw timing and amounts are lender-specific. A BC mortgage broker's guide (E7 Mortgages, updated July 30, 2026) describes a typical residential sequence of land or initial advance, foundation, framing or lock-up, mechanical and interior, and completion, and stresses that the lender's written commitment and inspection requirements control. Some programs charge interest only on the amount advanced so far during construction.
Typical draw stages and what the lender checks
Stage names and percentages vary by lender; this is the common pattern and what usually has to be true before money moves.
| Draw stage | Work usually complete | What the lender typically wants to see |
|---|---|---|
| Land or initial advance | Lot purchase or refinance; permits issued | Appraisal, building permit, budget, builder contract, BC Housing warranty enrolment |
| Foundation | Excavation, footings, foundation walls, underground services | Inspector's site visit; municipal footing and foundation inspections passed |
| Framing or lock-up | Structure, roof, windows and exterior doors; house weather-tight | Inspector's site visit; framing inspection |
| Mechanical and interior | Rough-ins, insulation, drywall, cabinets, flooring | Inspector's site visit; rough-in and insulation inspections passed |
| Completion | Finishes, final inspections, occupancy | Occupancy permit and final inspection (the as-built Step Code report is part of getting occupancy on a new home) |
These stages line up with the hold points in our order of trades guide. A failed municipal inspection usually delays the matching draw, so a schedule that respects inspections is also a schedule that keeps cash flowing.
The Builders Lien Act holdback: 10%, 55 days
Under section 4 of BC's Builders Lien Act, the person primarily liable on each contract "must retain a holdback equal to 10% of the greater of" the value of the work or material actually provided, and the amount of any payment made. As the owner, that means you (or your lender on your behalf) pay 90% of each draw invoice and keep 10% back.
When is the holdback released?
- Holdback period (s.8): the holdback period expires 55 days after a certificate of completion is issued, or, if there is no certificate, 55 days after the head contract or improvement is completed, abandoned or terminated.
- Lien filing deadline (s.20): a claim of lien must be filed no later than 45 days after the same events. That is why the holdback runs ten days longer: it outlasts the lien window.
- Certificate of completion (s.7): a contractor or subcontractor can ask the payment certifier to certify completion. The certifier has 10 days to decide, and then 7 days to deliver copies and post notice at the site. This lets a trade that finishes early, like the foundation crew, start its own 55-day clock.
Do I need a holdback trust account?
Section 5 requires the holdback to be kept in a holdback account at a savings institution. Section 5(8) says those account rules do not apply where the aggregate value of the work and material is less than $100,000. Most new homes are well above that, so expect a holdback account unless your lawyer advises otherwise.
Worked example: a draw with holdback
Here is how the arithmetic works on an illustrative $800,000 build contract. The numbers are made up for the example; your contract and lender set the real ones.
- The builder invoices $200,000 for work completed at the framing stage.
- The holdback is 10% of $200,000, which is $20,000.
- The lender's inspector confirms the stage, and $180,000 is paid to the builder.
- The $20,000 goes into the holdback account.
- Across the whole contract, holdbacks add up to $80,000, released 55 days after completion if no lien has been filed.
Your builder pays its own subtrades the same way, so the 10% rule runs all the way down the chain.
What causes a draw to be late?
- Work not quite at the stage. If the lender's stage says "roof on and windows in" and two windows are back-ordered, the inspector may not sign.
- A failed municipal inspection. Lenders often want the matching inspection passed first.
- Cost overruns. If the remaining loan will not cover the cost to complete, the lender can ask you to inject cash before advancing more.
- Liens on title. A filed lien can stop advances until it is cleared.
- Paperwork. Missing invoices, statutory declarations or proof of holdback.
As the broker guide quoted above puts it, "Do not assume the next draw will arrive in time to pay the next invoice." Keep a cash buffer, and build your contract's payment schedule around the lender's draw stages, not the other way around.
Questions to settle before you sign
- Do the builder's payment milestones match the lender's draw stages?
- Who holds the 10% holdback, and where is the holdback account?
- How are change orders priced and paid between draws?
- Who books the lender's inspector, and how much notice does the inspector need?
- Is the home registered with BC Housing and enrolled in home warranty? For a new home built by a licensed builder, the registration is required before the building permit is issued, so ask for proof early.
Our list of 12 questions to ask a custom home builder covers contract type and change orders in more depth, and the cost to build a house in Victoria BC guide helps you size the loan. If you are building yourself, read owner-builder vs licensed builder in BC first, and ask your lender early whether it finances owner-built homes.
ACAP LTD works with owners and their lenders on draw timing as part of its general contracting service. If you are lining up construction financing, contact us and we can map our schedule to your lender's draws.