Can you get your mortgage somewhere other than the bank you started with?
No matter which bank you're with or used when you moved to Canada, you aren't obligated to get a mortgage through them. You have the option to find a mortgage at a different lender, which could help you save thousands of (mortgage) dollars.
At True North Mortgage, we've helped so many new-to-Canada home buyers and owners find their best mortgage solution. We deal with banks and lenders for you and can often pass along volume-rate discounts.
We put you first, for personalized, unbiased advice to help you save more on your first home and mortgage in Canada.
As a newcomer, how much down payment do you need?
If you have permanent resident status (subject to federal eligibility), you can purchase a home with as little as 5% down payment (home price restrictions apply).
For those with non-permanent resident status, the 5% minimum down payment may apply if you have at least 12 months of established Canadian credit (available through Sagen's or Canada Guaranty's insured mortgage programs). If not, a 10% minimum down payment applies.
If you provide less than a 20% down payment, you'll require mortgage default insurance, which can also help you qualify for a better mortgage rate. (See below for more about insured mortgage options.)
What documents do you need for a newcomer mortgage?
You’ll need to show identification, income, and payment history to qualify for a mortgage in Canada.
Proof of identity and status. Provide your passport, work permit, or permanent resident card, or documents showing refugee or temporary worker status.
Proof of income. Lenders will ask for recent pay stubs, employment letters, or tax records showing your income in Canada.
Credit and payment history. If you don’t yet have a Canadian credit report, lenders can use a foreign credit bureau report (usually covering 12 months). You may also need to provide other payment records, such as rent or utility bills, to demonstrate a reliable payment history.
Down payment history. Down payment from Canadian or foreign funds must have a 90-day history and not be from a sanctioned country.
Your True North Mortgage broker can help you understand what each lender or insurer needs and guide you through the paperwork.
Accessing insured mortgage products if you're new to Canada.
All three mortgage default insurance companies (CMHC, Sagen and Canada Guaranty) provide their own New to Canada Program to support mortgage approval with lenders.
Benefits of insured programs for newcomers:
- Access to Homeownership. Insured mortgage products and programs can help simplify and streamline your mortgage qualification to own a home.
- Better Interest Rates. Having access to insured financing opens up more competitive mortgage rates from several Canadian lenders.
- Availability. Coast-to-coast-to-coast, but depends on whether a lender will lend for the home's location (some rural locations may not be eligible), and maximum loan amounts may depend on the down payment percentage of the home purchase price.
Who qualifies for a newcomer insured mortgage program?
Those with permanent resident status:
- Can often access any CMHC, Sagen, or Canada Guaranty default-insured product (subject to eligibility).
- Can often apply for a mortgage with a loan-to-value (LTV) ratio of up to 95%.
- Alternative credit documentation is often accepted (foreign report or rent/utilities).
- U.S. citizens typically require a U.S. credit report.
- No additional fees or premiums based on residency.
Those with non-permanent resident status:
- Federal eligibility requirements apply (such as having a valid work permit with at least 183 days remaining).
- Can often access default-insured financing up to 90% LTV for a 1-unit, owner-occupied home.
- Same alternative credit history options as above.
Can you get a conventional (uninsured) mortgage as a newcomer?
It may be possible, but a conventional mortgage loan is not always the easiest path. Even with a 20% or higher down payment, many newcomers still rely on a default-insured mortgage program to qualify — especially if they don’t yet have a strong Canadian credit history or long employment record.
Mortgage default insurance helps lenders approve more applications because the risk for the lender is lowered, which can also mean a better rate for your mortgage.
Once you’ve built a solid credit profile in Canada, you may have better access to conventional (uninsured) mortgages, which don’t require insurance premiums.
