Getting A Mortgage If You're New To Canada

If you are buying a home and are new to Canada, there are two insurance companies that currently offer insured financing to the following class of borrowers: non-permanent and permanent residents. These insurance companies are Sagan and CMHC (Canada Mortgage and Housing Corporation).

New To Canada Mortgage Program Benefits
  • If you are a permanent resident, then you are eligible to apply for all financing that is currently insured by CMHC and Sagan (formerly Genworth).
  • If you are a permanent resident but have little credit or a credit card, then the insurance companies listed above will still review your application on a case-by-case basis. 
  • If you have non-permanent resident status, you can apply for a mortgage with these insurance companies, but you will require at least a 10% down payment.
  • You will still be eligible for the most competitive interest rates.
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If you are a new immigrant to Canada, you may wonder whether you can buy a home and qualify for mortgage financing. 

The good news is thanks to “New to Canada Mortgage Programs”, your dreams of homeownership here can easily become a reality.  If you are a newcomer to Canada, let us help you make sense of the mortgage approval process today.

Criteria Required To Qualify For New To Canada Mortgage

Perhaps you have been turned down or declined by a big bank because you do not meet their criteria. That’s alright. We have access to many lenders who use mortgage default insurance to approve newcomers for mortgage financing at the very best interest rates.

According to Sagan and CMHC, if you’ve been in Canada for less than 5 years, have a work visa or landed immigrant status, secure employment and credit history in Canada, you are, in fact, eligible to apply for a mortgage under this program.

You will also be required to have the minimum down payment available to purchase a home which is currently five (5) percent of the purchase price. The maximum amount of time your mortgage can be amortized for is 25 years. 

Permanent Resident Status and Applying for A Mortgage In Canada

If you are New to Canada, your first step to becoming a permanent resident is to transition into becoming a Canadian Citizen. According to the Government of Canada’s immigration policy, you must have been living in Canada for at least two years within the last five years to qualify for permanent resident status.

If you are not a permanent resident at the time of your mortgage application, and it has been under five years since you arrived here, it is still possible to apply under the “New to Canada Program.” For example, some newcomers have to finish school before they are eligible to apply. We can always work with you to make sense of your application. 

Building Your Credit When You're New To Canada

If you are planning on purchasing a home when you arrive in Canada, it’s important that you take steps to build your credit history here. 

 Here are some ways you can improve your credit: 
  1. Major Credit Cards. Applying for a credit card or even obtaining a pre-paid one, can help you build credit relatively quickly and in as little as 18 to 24 months. Ensure that you make all your payments on time, and stay well below your credit limit.
  2. Loans: Getting a loan like a car or student loan for example, can help create strong credit history and a solid financial profile. 
  3. Bill Payments: Paying your rent, utilities and cell phone bills, for example, can add evidence of lower risk for the lender to your credit history. Sometimes, a lender will ask for proof of rent or utilities payments in the absence of reported credit through credit cards or loans.  As a result, it’s important you always pay your rent and utilities on time. 

Proving Other Forms of Credit  

Sometimes, when applying under the New to Canada program, you may be asked to provide additional documentation that will help strengthen your application. This information will be provided to the default mortgage insurance companies such as Sagan and Canada Mortgage and Housing Corporation. 

Here are some supporting documents that may be requested from you: 
  1. Employment letter or work contract. 
  2. Rental History and a copy of 12 months of recent bank statements demonstrating that you have paid your rent on time without any missed or late payments. 
  3. Hydro/Utilities Bills.
  4. Confirmation that your application for permanent residency has been submitted to the Government for processing. 
  5. A credit report from your country of origin. 
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Minimum Down Payment If You're New To Canada

The minimum down payment required in Canada is five percent, however, it’s always better to put at least a 20% down payment to avoid paying high ratio mortgage insurance which is added to your total loan amount and amortized out over the life of your mortgage, increasing your mortgage payments.