New immigrant, less than 3 years in Canada? Excellent!

Mortgage for Canada newcomers

Just because you are a new immigrant does not mean that you have to wait to purchase a home. You can qualify for a mortgage. Banks have special programs for newcomers having money only for 5% downpayment (at least 3 months of full time employment required). Also, there is a program for those who has no job yet, but is able to pay a 35% downpayment. Why do you need to spend your money on renting a property when you can get your own affordable home in Canada?

Helping new Canadians get a home of their own

The most important considerations for newcomers are Canadian Credit Bureau history (which, of course, can not be long enough) and downpayment (saving a large amount of money takes a long time). Lenders understand that if you are new to Canada and do not have any established credit yet, that does not necessarily mean that you'll be a bad payer, so you can qualify for a mortgage with three months of employment history and by demonstrating credit worthiness to your lender in other ways:

  • 3 months minimum full time employment in Canada (NOT as contractor or self-employed!). The time on probation is taken into account, but the employer must confirm, that the probation period has been passed successfully. Borrowers being transferred under a corporate relocation program are exempt. Employment letter and pay stubs required.

  • Proof of timely rent payments confirmed by your landlord (non-family member) and bank statements.

  • A credit report from your country of origin.

  • Sometimes, lenders require a bank statements showing 12 months history of regular payments such as utilities, telephone, cable, insurance premiums. So, you need to have lived in Canada for at least 1 year. But, in many cases, the requrement of 12 months payments history doesn't exist, especially if you have a higly compensated job and a good credit history from your country of origin.
Even though it is not required, it is a good idea to start establishing credit in Canada as soon as you can.

Downpayment requirements of the "New To Canada" program

  • The minimum downpayment is:

    • For permanent residents: see here.

    • For newcomers with non-permanent resident status (work permit): 10% (property price up to 1M), 20% (1M or more).

    • For those who are not employed (like international students and buyers who has not immigrated yet): 35%.

  • Must be from own resources, cannot be borrowed. If you are a Permanent Resident, then the part of the downpayment, which exceeds 5%, can be gifted by an immediate family member. For example: if the downpayment is 15%, then 5% must be from own resources, and 10% can be gifted by the parents.

  • If transferred from a foreign bank, the transaction must be reflected in print-out of transaction history of both the banks, and the money must have been on the Canadian account for at least 90 days.

  • If the funds for the downpayment are the proceeds from the sale of real property abroad, you need to provide the Agreement of Sale with a notarized translation into English.

No job yet? But have money for 35% downpayment?

There is a program which allows to take a mortgage even before you have found a job if you pay down 35% of the property price. It is also suitable for buyers having NO "permanent resident" status in Canada (like foreign students). The downpayment money must have been in your Canadian bank account for at least 30 days before applying for the mortgage.

That program requires that you have an ADDITIONAL amount of appr. 10% of the property price put aside. It's an amount sufficient to pay out the mortgage and the property tax during 2 years. You must have that amount on your account available and provable in the closing day; after that, you can spend it. Please pay attention: those 10% must present in addition to the closing costs (appr. 1.5% of the property price) and the downpayment (35%). So, to get a mortgage when you have no job, you need total appr. 46.5% of the property price (35% d.p. + 10% payments for two years + 1.5% closing costs).

Money to pay out the mortgage and the property tax during 2 years (i.e. the 10%) is NOT required if you pay down 50% (rather than 35%). In this case, you need 51.5% of the property price in total (50% d.p. + 1.5% closing costs).

The "New to Canada" program...

...exists due to the fact that insurance companies are willing to insure such mortgages. Here is a short cartoon, prepared by one of these companies, Genworth:

If you are a new Canadian...

...we will help you to make the transition from renter to owner as easy as possible. We can streamline the mortgage process for you, from counseling on credit, to obtaining credit references from foreign banks, to confirming foreign income. We will advise you on the paperwork you need to assemble to apply for a mortgage, and then present your financial history to the lender or lenders that can best meet your needs.


Once you are interested in obtaining a mortgage, then you most likely will also be interested in the help of an experienced real estate agent:

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