Are you considering buying property in Canada but unsure how foreign buyers navigate the mortgage system?
Canada’s mortgage process can seem complex for international buyers and filled with unfamiliar requirements.
But don’t worry! This guide breaks down every detail, from eligibility and paperwork to bank options and insider tips, empowering you to secure a Canadian mortgage confidently and successfully.
Canada’s housing market is famous for international buyers seeking property ownership, with options for permanent and temporary residents.
However, the government has implemented specific rules to prioritize affordability for Canadian citizens and permanent residents.
According to the Government of Canada, as of January 2023, foreign nationals face a temporary ban on purchasing residential properties solely for investment, extended through 2027. However, exceptions apply to certain buyer types.
Foreign buyers interested in Canadian mortgages must often meet stringent criteria.
Yet, banks like CMHC, RBC, Scotiabank, and CIBC offer tailored programs to support newcomers, including flexible down payment options, pre-approvals, and competitive rates.
Eligibility is the first and often most significant hurdle for foreign buyers. Here’s a look at what central Canadian banks require:
| Buyer Type | Requirements |
| Permanent Residents | Typically qualify similarly to Canadian citizens, with options for 5% down payments. |
| Temporary Residents | Must possess a valid work or study permit, with at least 10-35% down payment based on status. |
| Non-Residents | 35% down payment required, plus evidence of Canadian or U.S.-based income. |
| International Students | Must meet work permit requirements or intend to stay long-term with a higher down payment. |
| Refugees & Asylum Seekers | This may apply depending on the work permit status and IRCC documentation. |
Source: Government of Canada, RBC, Scotiabank, Requirements and cost are subject to change
Mortgage eligibility for foreigners in Canada varies by residency type.
Temporary workers and students with verified employment prospects often have access to more favorable terms than non-residents without Canadian income.
The down payment amount heavily influences mortgage qualification.
Here's a breakdown of what’s generally required:
| Property Price | Minimum Down Payment | Residency Requirement |
| $500,000 or less | 5% (permanent residents) | Canadian citizen or PR |
| Over $500,000 up to $1 million | 10% of the excess amount | Canadian citizen or PR |
| Foreign national (non-resident) | 35% | Proof of income or financial statement |
| U.S. citizens | 20% | Requires income verification in the U.S. or Canada |
Source: Your Equity, Simon Wong Mortgage Group, price, payment, and requirements are subject to change
Example: For a property valued at $600,000, a permanent resident would need a down payment of $35,000 (5% of $500,000 plus 10% of the excess $100,000), whereas a non-resident would require $210,000.
Lenders require a series of documents verifying financial stability to secure a mortgage.
Below is a checklist of essential documents:
"Having the right paperwork in order can speed up the mortgage application process significantly," says Simon Wong, a mortgage specialist focused on foreign mortgages in British Columbia.
According to Simon Wong Mortgage Group, non-residents without a Canadian credit history should obtain a reference letter from a reputable bank in their home country.
Canadian banks offer specific mortgage options for foreigners, each with unique requirements and benefits.
Here’s a comparative look:
| Bank | Program | Key Requirements | Benefits |
| RBC | Newcomers Program | 20%-35% down payment; No Canadian credit history needed | 30-year amortization, competitive rates |
| CIBC | Newcomer to Canada Program | Work permit or PR status; valid bank reference | Quick approval, tailored newcomer support |
| Scotiabank | StartRight Program | Permanent residence within 5 years | Range of fixed/variable rates, mortgage protection |
| TD | First-Time Buyer Incentive (CMHC) | PR or work permit; income within qualifying limits | Shared-equity down payment for lower monthly costs |
Sources: RBC, CIBC, Scotiabank, CMHC, TD, & Loans Canada, requirements subject to change
Tips: Newcomers with limited credit history can benefit from programs offering 30-year amortizations and competitive rates, making it easier to afford homes in high-cost areas like Vancouver and Toronto for RBC.
Foreign buyers face additional taxes and fees in Canada:
Example: If purchasing a $750,000 property in Vancouver, expect an additional $150,000 in foreign buyer taxes.
Sources: Government of Canada, Simon Wong Mortgage Group, cost, and taxes are subject to change and vary for different states.
Example: A foreign buyer seeking a property in Toronto could secure pre-approval through RBC’s Newcomers Program, find a suitable home, and close the purchase with the support of a local real estate agent and lawyer.
Foreigners can apply by choosing a lender that offers non-resident or newcomer mortgage programs, gathering necessary documents, and meeting eligibility requirements. Down payment requirements are often higher for non-residents.
Yes, it’s possible. Many banks, such as RBC and CIBC, allow foreigners to apply with an international credit report or a reference letter from their primary bank abroad.
Based on Simon Wong Mortgage Group, non-residents typically need a 35% down payment. However, U.S. citizens may be eligible for a lower down payment of around 20%, depending on the lender.
Foreign buyers in provinces like British Columbia and Ontario pay a foreign buyer tax (up to 20% in BC). In Vancouver, they may also be subject to a vacancy tax if the property remains unoccupied for over six months.
According to Your Equity, foreign owners can earn rental income but must report it to the Canada Revenue Agency (CRA). The income is subject to a 25% tax on gross rent, though deductions may apply for certain expenses.
Yes, as of 2023, the Government of Canada had implemented a temporary ban that prevents non-residents from buying residential property solely for investment. However, work permit holders, students, and some temporary residents are exempt from this restriction.
Both fixed and variable rates are available, depending on the lender and applicant’s preference. Fixed rates remain consistent, while variable rates may fluctuate based on market changes. Variable rates are often slightly lower but riskier if the market changes.
Securing a mortgage as a foreigner in Canada may seem complex, but it's achievable with the proper preparation and understanding of requirements.
You can confidently navigate Canada's property market by choosing the right mortgage program, meeting the necessary criteria, and understanding additional costs.
Ensure that you work with knowledgeable real estate and mortgage professionals, gather all required documentation, and consider the financial impact of foreign buyer taxes and higher down payments.
By following this guide, you’ll be well-equipped to make informed decisions and start your journey toward owning a home in Canada, bringing you closer to establishing a valuable asset in a stable and attractive market.
For personalized assistance, consult a mortgage advisor who can guide you through the steps tailored to your situation.
Ready to invest in Canadian property? Unlock your potential with tailored mortgage options for foreigners. Start your journey toward a secure investment with Juwai Asia today—Canada awaits!
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