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(August 19, 2022)

If you are new to Canada, let this be the first website to officially welcome you – Welcome to Canada!

Here’s what you need to qualify for a mortgage if you are new to Canada:

a valid work permit (must remain valid until the completion date of your home purchase). This is VERY IMPORTANT. If your work permit is not valid on the day you complete the home purchase, the lender will collapse the approval and you will lose your deposit and could potentially be liable for other losses incurred by the seller.
a minimum down payment of 5% is required when purchasing a home in Canada, but once you reach a purchase price of $500,000 it increases as follows:
- 10% on the balance that exceeds $500,000 up to $999,999
- for purchases of $1M or greater, the minimum down payment starts at 20%, then scales to various other levels once you reach a purchase price of $2.25M (contact Marko directly if you are in this range to discuss further)
employment is required – must be full-time and tax deductions must be made at source (this basically means that you cannot be self employed, unless you have satisfied the minimum self employment tenure in Canada of 2 years). You must be employed for at least 1 month and be able to provide evidence of two complete and successive pay cycles
most lenders allow New-to-Canada mortgage qualification privileges if you remain a Temporary Resident within a 5 year time frame. After 5 years, only a select few lenders will consider you as a Temporary Resident at which point your minimum down payment may substantially increase to 35% (unless you have naturally transitioned to Permanent Residency where you can maintain the minimum scaled down payment requirements as listed above)
one of the main privileges of the New To Canada mortgage qualification program is that it loosens the personal credit history requirements. The program recognizes that Temporary Residents may not have established credit history in Canada, and therefore, significantly reduce its qualification thresholds as such. If you do not have Canadian bank credit cards and loans, lenders will allow you to provide alternative sources instead such as: letter of reference from your landlord, cell phone bills, utility bills, letter of reference from your bank from the country you departed from, etc.

Do Temporary Residents have to pay the FOREIGN BUYER TAX?

yes, and no. As you will discover, Canada is a broad landscape with different real estate markets and varying taxation policies from province to province, and city to city. In most cities across Canada, Temporary Residents do not have to pay the foreign buyer tax. But in Canada’s two major cities, Toronto and Vancouver, Temporary Residents do indeed have to pay the forign buyer tax. In addition to Toronto and Vancouver, the foreign buyer tax also applies to the following cities/regions:
- BRITISH COLUMBIA – Victoria (and surrounding area), Fraser Valley, Vancouver (and surrounding area), Central Okanagan, and Nanaimo. Click Here for a complete list of all the towns and cities.
- ONTARIO – as of March 2022, foreign buyer tax is applied province-wide in Ontario (absolutely everywhere!)
All other provinces in Canada are EXEMPT from the Foreign Buyer Tax (hint: move to Alberta and live in Calgary where you can purchase 2 homes for the price of one Vancouver or Toronto home)
how much is the foreign buyer tax? It’s 20%, and it’s due on the possession date of your home purchase. Also worth noting, the 20% foreign buyer tax CANNOT be included in your mortgage. In addition to your minimum down payment for mortgage qualification, you must also pay the foreign buyer tax on the day you complete your home purchase. For example, for a $600,000 home, you would require a minimum down payment of $35,000 and $120,000 for the foreign buyer tax. Your total cash-to-close required would equate to $155,000! To learn more about the Foreign Buyer Tax click on the following links to be redirected to the appropriate provincial jurisdictions: British Columbia, Ontario.
The good news about Foreign Buyer Tax is that there are exemptions. As I have not yet posted a blog on Foreign Buyer Tax exemption, please don’t hesitate to reach out to me (Marko Gelo) directly by engaging within the chat pop-up below, or go ahead and call or text me at 604-800-9593

What if I’m a PERMANENT RESIDENT?

If and/or when you become a Permanent Resident, you qualify for a mortgage just as any Canadian citizen would and the foreign buyer tax would no longer apply to you!

Moving to another country is a gigantic endeavour. I personally know and understand as my parents immigrated to Canada in the 60’s. Don’t hesitate to reach out to me (Marko Gelo), I am available and ready to help you through the journey of purchasing your first home in the most amazing country in the world!