The same applies to New Horizons, though at least the first upgrade (from tent to house) is required to progress the island. You still need to finish paying off your current upgrade before you can buy another, but you can decide to keep your current size after paying it off. This lasts until New Leaf, at which point he sells upgrades in his shop much like any of the other remodeling jobs he has on hand. and if you say no, he says he's certain you won't be satisfied with a tiny house and goes ahead and upgrades it anyway. If you say yes, he goes ahead and builds it. When you've finished paying a loan off in the early games, he'll ask whether you want to make another upgrade.