New to Canada

New to Canada? We Can Help You Get a Mortgage too!

Moving to a new country and starting a new life in Canada can certainly be challenging. Many of our lenders offer mortgage options to help you get settled into your new Canadian life, in your own home. If you are a newcomer to Canada, we can help answer all your questions and help you to navigate the process. Read on to learn more about how mortgages for newcomers to Canada work and how to get approved for one.

Lenders understand that recent immigrants have difficulty establishing Canadian employment and credit history, so programs have been put in place to help newcomers to resettle as easily as possible. These programs have more lenient guidelines for newcomers and the procedures are relatively straightforward.

What You Need to be Eligible for a Newcomers Mortgage:

• To be considered a recent immigrant, you need to have been in Canada for less than five years.
• Both permanent residents and non-permanent residents are eligible for a newcomers mortgage, although non-permanent residents may be required to have a larger down payment.
• You must have legal status in Canada. This can mean a permanent resident/landed immigrant or a non-permanent resident with a work permit or an international student.
• You need to have been employed in Canada for at least three months unless you are being relocated to Canada by your current employer.
• Like other Canadians, you must meet qualification ratios. You will need to have a gross debt service ratio (GDS) of 39% or less, and a total debt service ratio (TDS) of 44% or less.

What You Should Know Before Applying for a Newcomers Mortgage:

• You should work on establishing your Canadian credit record as soon as possible. Some banks will help you to establish Canadian credit with credit cards specifically for newcomers, prepaid credit cards or even an auto loan. Credit history can show the lender that you are responsible with your finances and make your payments on time.
• The minimum down payment for a newcomer’s mortgage can be as little as five percent on a home that is valued at less than $500,000. For those with no credit history, the down payment requirement could be as high as 35%. This is why it is important to establish credit in Canada as soon as possible.
• Having a Canadian work history of at least two years will be helpful. This demonstrates to the lender that you have the means to repay the mortgage and have a stable income.
• The mortgage stress test rate will be used to test your GDS and TDS ratios. This includes your foreign debt as well as Canadian debt.
• With many lenders, if your down payment is less than 20%, you’ll need mortgage default insurance and your amortization will be limited to 25 years.
• If you have less than two years of employment history in Canada, you’ll need a 35% down payment.
• Your down payment cannot be gifted or borrowed.

Offered by several banks in Canada, a newcomer mortgage can be a great help for those new to Canada. They are designed to work with newcomers who wish to purchase a home, even if they do not yet meet the eligibility requirements for a traditional mortgage. Each lender’s criteria varies and some are easier than others, depending on your situation.

At Ottawa Mortgage Market, we work closely with a variety of mortgage lenders who welcome applications from newcomers to Canada. Our experience can help you to find the right lender for your situation quickly and get you into your first Canadian home as soon as possible. Call us today to get started!

Call Ottawa Mortgage Market today to schedule a consultation with one of our mortgage experts. We’ll help you get the financing you need to build your net worth and the year-round enjoyment of a vacation property.