Temporary Residents

Mortgages for those new to Canada can be insured against mortgage default by the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty. These insurers all have basic borrower qualifications. In order to be eligible for a newcomers mortgage:

Immigrated to Canada within the last 5 years
In order to be considered a newcomer, you must have immigrated to Canada within the last 5 years. If you’ve been in Canada for longer than 5 years, you are no longer considered to be a new immigrant.

Have legal status in Canada
You must be in Canada as a temporary or permanent resident. This means that you should be a permanent resident/landed immigrant, or be a non-permanent resident with a work permit.

Have been employed full-time in Canada for at least 3 months
While you might not need to have 2 years of employment history for a new immigrant mortgage, you will need to have at least some full-time employment history. You will need at least three months of full-time employment history in Canada unless you are being relocated to Canada by your current employer.

Have a down payment of at least 5%
You will need to make a down payment of at least 5%. This minimum down payment requirement can be higher, such as if the home price is over $500,000. Your lender can require the minimum down payment to come from your own resources and savings, rather than being gifted or borrowed. Some lenders may require a higher down payment, such as 20%, if you’re not able to qualify for an insured mortgage. The minimum down payment can even be as high as 35% if you don’t have a Canadian credit history.

Meet qualification ratios
Your debt service ratio shows how much of your income goes to service your debt. The higher this ratio, the worse it is, since you’re spending more of your income to service debt. 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.
The mortgage stress test rate will be used to test your GDS and TDS ratios. Your foreign debt is included when calculating your GDS and TDS, but your foreign rental income is not included.

If you meet these basic qualifications, it’s now time to choose your mortgage lender. This could range from big Canadian banks to smaller local lenders. You can also work with a mortgage broker to help you get a newcomer mortgage.