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Immigrating to a new country is no easy feat and often involves countless financial hardships. One of the financial issues that immigrants face is that you cannot transfer a credit report and rating from one country to another, and instead must build it from scratch. This makes it difficult to qualify for credit products such as credit cards, lines of credit, business loans, and of course, mortgages. 

Fortunately, there are many new to Canada mortgage programs available for you to make it easier to get into the Canadian housing market as a newcomer.

Key Points

  • Newcomers to Canada have a few options available to help them secure financing to buy a home in Canada.
  • Canada’s big banks offer mortgage programs specifically for newcomers, though loan criteria may be more stringent compared to mortgages for Canadians and permanent residents.
  • Non-residents may need to wait to buy real estate in Canada due to the ongoing Foreign Buyer Ban currently in effect until 2027.

What Type Of Newcomers Can Get A Mortgage In Canada?

Only those with permanent resident (PR) status can secure a mortgage in Canada. If you are a non-permanent resident, you must have a work permit that legally allows you to work in Canada to be eligible for a mortgage. 

New To Canada Mortgage Programs

Luckily, there are a few mortgage programs offered by various lenders that cater to newcomers to Canada. Each program has different rates, term lengths, eligibility, and benefits. 

RBC Mortgage For Newcomers To Canada Program

RBC has different options for newcomers depending on their employment history and ability to save for a down payment. 

For newcomers with a 20% down payment and two years of employment history, RBC might qualify you for a conventional mortgage. If you aren’t able to save up 20% for your down payment, you will need to insure your mortgage. This can cost a couple of hundred dollars every month on top of your principal mortgage payments and interest. 

For newcomers who don’t have a two years employment history, the down payment requirement is much higher. Without 2 years of employment history, newcomers will need the following:

  • A down payment of at least 35%
  • A letter of reference from a bank in your home country
  • Immigrated to Canada within 5 years
  • Permanent residence status
  • Minimum of 3 months of full-time employment in Canada

There are many benefits to RBC’s program, such as:

  • No credit history required in Canada
  • Quick approvals
  • Competitive rates
  • 30-year amortization periods
  • One-on-one consulting with a mortgage specialist

Scotiabank StartRight® Mortgage Program For Permanent Residents

Scotiabank’s StartRight Mortgage Program is meant for newcomers who have been permanent residents for 5 years or less. Scotia Bank offers:

CIBC Newcomer To Canada Program Mortgage

They have three mortgage programs for newcomers:

CIBC Newcomer To Canada Program Mortgage

This program is for newcomers with limited credit histories who have enough income to afford their mortgage payments. 

CIBC Newcomer To Canada Plus Program Mortgage

This program is for newcomers who are permanently living in Canada or Canadian citizens who were living abroad and are now permanently living in Canada. Applicants don’t need Canadian credit history to apply. 

CIBC Foreign Worker Program Mortgage

This mortgage program is specific to newcomers with a valid work permit, even if they don’t have permanent residence or Canadian credit history. 

For more information about CIBC’s newcomer mortgage programs, check out their website.

How Much Of A Down Payment Do You Need To Have As A Newcomer?

The amount of money you need to save for a down payment to apply for a new to Canada mortgage program depends on your permanent resident status. Generally speaking, non-residents must meet more stringent loan criteria and make a larger down payment to minimize the lender’s risk. 

In general, the minimum down payment on homes under $500,000 is 5% and 10% on purchase prices between $500,000 to $999,999

Depending on the lender you work with, the requirements for down payments may vary.

What Documents Do You Need To Apply For A Mortgage In Canada As A Newcomer?

The application requirements for a newcomer getting a mortgage are often more comprehensive than for a Canadian citizen. Without a banking history, employment history, and credit history in Canada, lenders usually require a lot of information and documentation from newcomers applying for mortgages. 

Here are some of the common documents requested by lenders:

  • Permanent Resident Status, Landed Immigrant Status, or a valid work permit
  • Proof of income
  • Record of down payment 
  • Purchase and sale agreement
  • Employment history of at least three months
  • Proof of rental payments and a letter from the landlord
  • Records of payments to service providers, such as cell phone plans and utilities
  • Reference letter from a financial institution, even if from a newcomer’s home country
  • Bank statements
  • Savings documentation
  • International credit report

Can I Get A Mortgage Without An Employment History In Canada?

Most mortgages require documentation of employment history for two years in Canada. It’s much easier to get a mortgage with an employment history in Canada; however, it’s still possible to obtain a mortgage without it. For example, with RBC, you can qualify for a mortgage with a 35% down payment. You also need to meet the following criteria:

  • Immigrate within the last 5 years
  • Permanent Resident Status
  • 3 months employment history in Canada
  • Letter of reference from a bank in your home country

Despite it being possible to obtain a mortgage without much employment history, you are better off working for two years before applying for a mortgage. This is because it will likely take you that amount of time to save up for a whopping 35% down payment anyway.

Ban On Home Buying Among Non-Residents

Non-residents of Canada need to note that there is a ban on speculative foreign home buying which came into effect on January 1, 2023. This ban was introduced as a way to open up more housing inventory for those living in Canada.

The Foreign Buyer Ban was loosened to some degree a few months later to allow some newcomers to buy a home in Canada. Exceptions to the ban include the following:

  • Permanent residents
  • Refugees
  • Eligible temporary workers with a valid work permit
  • Empty land zoned for residential properties

That said, the ban is still in effect and will be until at least early 2027. This will affect many newcomers’ ability to purchase property in Canada. 

Other Financing Programs Available To Newcomers To Canada

In addition to new to Canada mortgage programs to help newcomers obtain home loans, there are other financing programs available to eligible applicants:

Micro Loans 

Companies like Windmill Microlending provide affordable small loans to newcomers to make it easier to access funds needed to start a new life in Canada. Windmill Microlending offers loans up to $15,000, along with support through mentorship, career path coaching, budgeting tools, and other features. 

Immigration Loans Program (ILP)

The government of Canada provides loans to immigrants, particularly refugees, through the Immigration Loans Program (ILP). This unique program provides newcomers with the following:

  • Transportation loans to cover the cost of travel to Canada, accommodation, and food before departure.
  • Assistance loans to cover the cost of initial settlement and basic needs, such as rent, clothing, food, and utilities.
  • Right Of Permanent Residence Fee (RPRF) loans to cover the cost of RPRF when applying for permanent residence in Canada.

Foreign Credential Recognition (FCR) Loan Program 

The FCR Loans Program helps skilled immigrants get into the Canadian job market in their field of expertise. The program provides financial assistance and career guidance to those having trouble finding work or having their credentials verified in Canada. Loan amounts vary from $1,000 to $30,000 with repayment terms of 1 to 10 years and competitive interest rates.

Final Thoughts

Newcomers face challenges while immigrating and adjusting to a new life that Canadian citizens could not imagine. Despite the financial challenges of living in a new country, Canada has many banks and financial institutions with new to Canada mortgage programs that cater to newcomers’ circumstances. With a couple of years of building credit and employment history, and with the support of some specialized programs, newcomers can attain mortgages and become homeowners. 

Mortgage For Newcomers FAQs

Can I get a mortgage if I don’t have a credit history in Canada?

Yes, it’s possible to obtain a mortgage without a credit history, albeit it’s much harder to do so. For example, with RBC, you can qualify for a mortgage without a credit history if you’re a newcomer who has been in Canada for less than 5 years. You’ll also need to produce a variety of documents, such as:
  • Passport 
  • Landing papers (Work permit or visa)
  • Canadian PR card
We recommend building a credit history in Canada before applying for a mortgage. You can do this in many ways, like signing up for a phone bill, secured credit card, and more. 

Can I get a mortgage with a big bank as a newcomer in Canada?

Yes, you can get a mortgage with a big bank, or A-lender, even as a newcomer to Canada. Many financial institutions, including big banks, have mortgage programs that consider the unique situations of newcomers. However, there are always alternative lenders available like credit unions and online lenders if a big bank won’t lend to you. 

What is the non-resident speculation tax?

Foreign buyers must pay an additional Non-Resident Speculation Tax (NRST) when buying property in Ontario. This tax is 25% of the purchase price on residential properties anywhere in the province.
Chrissy Kapralos avatar on Loans Canada
Chrissy Kapralos

Chrissy is a Toronto-based communications advisor. With an English degree from the University of Toronto and editing courses under her belt from Ryerson University, she has continued her lifelong passion for writing and editing. In addition to working for Loans Canada on a variety of financial topics, Chrissy has a few years of resume writing and editing under her belt, and takes great pleasure in helping people find work that fits with their experience and passions. When she isn't working, you can find her practicing yoga, hanging out with her dog, reading up on financial and real estate news, or planning her next trip abroad.

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