Shopping for Mortgage Rates as a Newcomer to Canada
Nerdy takeaways
Non-citizens are eligible for mortgages in Canada.
Permanent residents with at least three months employment and a 5% down payment have the best chance of approval.
Using special newcomer mortgage programs will reduce your stress and could save you money.
New to Canada? You can still qualify for a mortgage
🧳 Moving to a new country is an exciting adventure, but it can also be overwhelming.
You may have to learn a new language. You'll have new neighbors, coworkers or classmates to get acquainted with. And then there's also an entirely new banking system to get used to.
Canada has certain rules that determine who's eligible to buy property. Likewise, financial institutions have requirements you'll need to fulfill if you plan to borrow money to purchase a home — called getting a mortgage.
Even if you owned property in your home country, the terminology, rules and mortgage lender options may be completely different here in Canada.
That's perfectly normal. Take a deep breath and don't worry; you're in the right place to learn all of the steps in this important process.
Whether you're a permanent resident, on a work permit, or just beginning your new life here, there are lenders who want to work with you — and we'll help you find them.
🤔 Why is getting a mortgage different for newcomers?
You may not have a Canadian credit score or credit history yet.
Some lenders don’t recognize foreign income.
You'll have to meet employment history requirements.
You may have to let your money sit in a Canadian bank account for a while before applying.
You might need a larger down payment.
💬 Several Canadian lenders offer mortgage programs designed for newcomers — some with flexible documentation requirements
🏡 Who qualifies for newcomer mortgages?
Permanent residents.
Work permit holders with at least 183 days remaining.
International professionals and skilled workers.
New citizens (less than 5 years in Canada).
Refugees and protected persons.
🔎 Each lender has different rules. Finding one that matches your situation will be key.
What you'll need to get a mortgage as a newcomer
If you'd like to become a homeowner in Canada — and you don't have enough money to buy a house with cash — you'll need to make sure you meet all of the eligibility requirements for a mortgage. Here are some of the common requirements:
🇨🇦 Residency status
In 2023, Canada introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which restricts many non-citizens and non-permanent residents from purchasing residential property. However, some categories are exempt from this rule.
The following residency statuses are typically eligible for Canadian mortgages. Always check with your lender or broker to be sure of their particular requirements.
Permanent resident (PR)
Temporary residents with work permits.
Study permit holders.
Refugees/protected persons.
💰 Proof of income
We took a look at the loan requirements of major Canadian banks and alternative lenders, and gathered together the most commonly-requested income documentation.
This isn't an exhaustive list, but it gives you a good idea of what you'll need to prepare.
Your most recent pay stubs.
Notices of Assessment from the Canada Revenue Agency.
Business financial statements (if applicable).
Proof of rental payments, utility bills or other financial history in Canada.
Proof of income sources (if any) other than employment.
💼 Employment history
If you have a job in Canada, mortgage lenders will want to know what type of employment it is and how long you've been in the position.
You'll likely be asked to provide:
Your work permit, or proof that permanent residence status is valid or processed (e.g. COPR)
Verification that work permit is valid for sufficient duration (so lender sees you won’t lose status mid-mortgage).
A letter of employment or a written job offer, stating your role, salary, start date, and whether your job is permanent or temporary, and full-time or part-time etc.
How much employment history do I need?
Most traditional lenders require newcomers to have at least 3 months of full-time employment in Canada to be eligible for a mortgage.
If you have longer employment history, that strengthens your application and may allow more favorable terms.
If you can't meet the minimum, you might need a larger down payment, stronger credit, or other compensating factors (foreign income, savings, etc.). Or you may just have to wait.
💵 Down payment funds
All mortgage borrowers, regardless of residency status, must make a down payment.
A down payment is money paid upfront on the day the mortgage closes, usually 5% to 20% of the mortgage amount.
Lenders will want to know:
Where your down payment is coming from (savings, investments, etc). This can usually be proven by providing bank account statements.
If your down payment funds are a gift, the bank will ask for a letter identifying the gift giver, and declaring that the funds don't have to be repaid.
Minimum down payment requirements in Canada are based on the purchase price of the house:
Under $500,000 the minimum down payment is 5%.
Between $500,000 and $1,499,999 you need 5% for the first $500,000 of the purchase price and 10% for the amount above $500,000.
$1.5 million or more the minimum down payment is 20%.
» If you have limited employment or credit history in Canada, however, your minimum down payment requirement could be as high as 35%.
🏦 Bank reference letter
A bank reference letter is essentially a character reference for your financial life.
These letters are issued by a financial institution in your home country and confirm details about your past banking relationships. In fact, you may have used one of these letters during the immigration process.
When applying for a mortgage, a bank reference letter can be particularly helpful if you lack Canadian credit history.
A bank reference letter usually includes:
The length of your relationship with the bank (e.g. "Client since 2015").
The types of accounts you have or had (chequing, savings, credit cards, loans), and possibly associated account numbers.
Your account standing (e.g. consistently in good standing, no overdraft issues, timely repayments).
Your average account balances or proof of recent funds.
Your repayment history for any loans, credit cards, or lines of credit with that bank.
A bank officer’s contact information, date, and official stamp or seal.
🆔 Personal identification
Lenders typically require one or more government-issued photo IDs and documentation confirming immigration and residency status.
Here are examples of what you might need to provide:
Passport from home country.
Canadian driver's license.
Permanent resident card (PR Card).
Conformation of permanent resident status (if you don't yet have your PR card).
Valid work permit or study permit.
Provincial or territorial photo ID card (if applicable).
But wait, don't I need a Canadian credit score and credit history?
Not necessarily. Lenders want to know that you have stable income and can afford your mortgage payments before they'll approve you for a loan.
Being able to show at least two years of responsible borrowing history and a strong Canadian credit score makes it easier for lenders to confirm that you're eligible for a mortgage, but it isn't the only way.
Option 1: Building your credit history in Canada
🙁 The bad news: The credit score you had in your previous country won't be valid here in Canada.
😀 The good news: Building up a solid credit history and strong score doesn't have to take forever. There are clear steps you can follow.
Open a Canadian bank account.
Use a Canadian credit card.
Pay your rent, utility bills, and mobile bills on time and in full.
Take out and repay a small installment loan.
These financially-responsible behaviors are recorded in your credit report. Together, they will start to form the basis of your credit score, which is a three-digit number that helps lenders summarize your creditworthiness.
Option 2: Getting a mortgage before you have Canadian credit history
If you're financially ready to buy a house, but don't yet have two years of credit history in Canada, a mortgage lender may be willing to confirm your creditworthiness in other ways.
You may be asked to show:
Proof of savings or personal assets.
Proof of current debts.
International employment history.
International credit report.
Rent history or utility bills.
Am I going to pay more, just because I'm an immigrant?
Not necessarily. Many banks offer the same interest rates to newcomers as they do to other borrowers, though the qualification requirements can be stricter.
For example, lenders may ask for a larger down payment (often 20% or more if you don’t meet standard credit criteria) or additional documentation.
Mortgage default insurance is an extra fee that may be required if your down payment is less than 20%, but that's true for any borrower.
One fee that's unique to non-citizens is the Non-Resident Speculation Tax (NRST). This is a provincial and/or municipal tax applied to property purchases in Ontario and some parts of British Columbia. However you may be able to avoid this fee through exemptions or rebates.
🎯 Why choosing the right lender matters
Buying a house is challenging for anyone, and as a newcomer you'll have a few extra hurdles to overcome.
That's why it's wise to seek out a lender that offers mortgage programs specially designed for newcomers. Or, if you'd prefer to work with a mortgage broker, find one who has experience helping newcomer borrowers.
Examples of newcomer mortgage programs:
Strive Capital's New to Canada program.
Radius Financial's New to Canada program.
BMO's newcomer mortgage options.
Scotiabank's Start Right program for permanent residents.
Ready to shop? Compare offers from lenders that work with newcomers
The table below features current mortgage rate offers from Canadian lenders who are known to work with newcomers to Canada.
Keep in mind, these rates are just a sampling of what they may be able to offer.
If you want an offer that's personalized to your financial situation, click the 'explore quote' button. Then, answer a few quick questions about yourself and the mortgage you're looking for.
At the end, you'll submit your info and a mortgage broker will get in touch to continue the process directly.
Not ready to pick a rate yet? Talking with a mortgage broker might help.
8Twelve has partnered with over 65 Canadian mortgage lenders to provide competitive rates on over 7,000 mortgage products. 8Twelve can quickly match you with a lender and mortgage type that meets your needs — even if your financial situation is unique.
Frequently asked questions
Can I get a mortgage without a Canadian credit history?
Can I get a mortgage without a Canadian credit history?
Yes — it is possible to get a mortgage in Canada without established Canadian credit history. But it tends to be harder, with more documentation needed, possibly stricter terms (higher down payment, maybe higher interest rates), and you’ll likely need to use a newcomer-mortgage program.
What’s the minimum down payment if I’m new to Canada?
What’s the minimum down payment if I’m new to Canada?
The minimum down payment is usually 5% of the purchase price (for permanent residents) if the home costs $500,000 or less. For more expensive homes, the required percentage goes up.
If you have limited or no Canadian credit or employment history, or your status is something other than permanent resident, lenders may require a larger down payment (up to 35%, depending on the lender).
Which lenders offer newcomer mortgage programs?
Which lenders offer newcomer mortgage programs?
Here are just a few lenders in Canada known to offer newcomer mortgage programs. Note, eligibility requirements and key features of these programs may vary.
Royal Bank of Canada (RBC).
CIBC.
Bank of Montreal (BMO).
Scotiabank.
Strive Capital.
Radius Financial.
Alterna.
Can I use money from another country for my down payment?
Can I use money from another country for my down payment?
Yes — you can use money from another country for your down payment in Canada, but lenders may ask for extra documentation to verify the funds were obtained lawfully. The money will typically need to have been deposited into a Canadian bank account 30 to 90 days before the mortgage closes.
Do I need to be a permanent resident to apply?
Do I need to be a permanent resident to apply?
You do not always need to be a permanent resident to get a mortgage in Canada — some lenders offer options for temporary or non-permanent residents, as long as certain eligibility conditions are met.
What is the Non-Resident Speculation Tax and how can I avoid it?
What is the Non-Resident Speculation Tax and how can I avoid it?
The Non-Resident Speculation Tax (NRST), sometimes called the Foreign Buyer’s Tax, is a fee charged to certain non-resident individuals when they buy a property in Ontario or certain regions of British Columbia.
The NRST rate in Ontario is 25%, in B.C. it's 20%.
These provinces may allow for a rebate or exemption from the NRST, if you meet certain criteria, such as becoming a permanent resident or being confirmed as a B.C. Provincial Nominee. Visit the websites of the Ontario and B.C. provincial governments to learn more.
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Clay Jarvis
Beth Buczynski
Clay Jarvis