Can I get a mortgage if I am new to Canada?

Often, yes: in Canada, many banks, credit unions, monoline lenders and mortgage insurers have newcomer programs for people with a short Canadian credit history. Requirements vary by lender: the down payment, employment history and documents you need depend on which lender and program fits your situation. Any mortgage is subject to lender approval.

Why newcomers are treated differently

A lender generally looks at three things: your income, your credit history and your down payment. When you arrive in Canada, you may have a solid job and savings but little or no Canadian credit history. The usual credit check tells the lender little, so newcomer programs replace it with other evidence.

Alternative evidence can include a credit report or reference letter from your previous country, a record of paying rent and utilities on time, and Canadian bank statements. Each program sets its own rules about what it accepts.

What lenders usually look at for a newcomer

Every program is different, but the common themes are:

• Employment in Canada: many programs look for a permanent job, sometimes with a minimum time in that job or in Canada.
• Immigration status: permanent residents and people on work permits are often treated differently.
• Down payment: some programs need more than the federal minimum, and lenders want to see where the money came from, including funds moved from abroad.
• Credit: whatever Canadian credit you have built, plus any alternative evidence the program accepts.

We do not quote program details here because they change and differ from one lender to the next. We confirm what each lender currently needs once we know your situation.

The rules that apply to everyone

The federal down payment minimum applies to newcomers too. The minimum is 5% of the first $500,000 of the price and 10% of the portion from $500,000 up to $1.5 million. At $1.5 million or more, the minimum is 20%. With less than 20% down, the mortgage needs default insurance. You also have to pass the stress test, which qualifies you at the greater of your contract rate plus 2 percentage points, or 5.25%.

Building Canadian credit before you buy

If you are a year or two away from buying, starting to build Canadian credit now can help. A Canadian credit card used lightly and paid in full each month, bills in your name paid on time, and steady banking history all help. The longer your Canadian credit record, the more lenders and programs become open to you.

If a bank, credit union or monoline program does not fit yet, an alternative lender may consider a broader range of evidence, usually at a higher cost. We look at institutional programs first.

What to do next

If you are new to Canada and thinking about buying, use our call-me-back form and we will look at which programs fit. You can also read about down payment rules.