What to Expect

If you are new to Canada and need a mortgage to finance a home purchase, there are several steps you must take and supporting documentation you may need to provide. The type of mortgage you will qualify for, and what documentation you’ll need to provide, depends on whether or not you are a permanent resident, what your credit rating is and how much you have saved for a down payment.

Build Your Credit

Alternative Credit Supporting Documentation

Save for a Down Payment

Calculating Your Mortgage Default Insurance Premium

Choose Your Mortgage Amortization Period

Select Your Mortgage Term

Choose Between a Fixed Rate vs. a Variable Rate

Overcoming The Challenge

If you are a permanent resident and have a strong credit rating, you may be able to qualify for a typical mortgage. If, however, you don’t meet all of the qualification criteria for a typical mortgage, you may still be able to obtain a mortgage through one of the New to Canada Programs offered by the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial and Canada Guaranty.


New to Canada Program Mortgages


Canada’s three mortgage default insurance providers each have their own New to Canada Program, aimed at helping newcomers obtain a mortgage in order to purchase a home. The requirements for all three programs are similar, you’ll find numerous breakdowns below.


Start by finding out your approval amount with us, including incentives and programs available for you.

House Hunting

The search for the perfect home begins with the right realtor that can work with your best interest in mind.


We co-ordinate with the bank and lawyer to get your mortgage funds issue in order to buy the home!


Your Lawyer works with sellers, lawyers, banks & many others to legally finalize your purchase.

A Breakdown and Strategy

Build Your Credit

The first step to getting a mortgage in Canada is to build your credit rating. A strong credit rating will help you get a better mortgage rate, which could save you thousands of dollars in interest charges over the life of your mortgage. Here is a list of activities that will help you build your credit:

Apply for, use and pay off a credit card each month
Pay your bills in full and on time, including rent, utilities and telecommunication services
Apply for small loans from your bank and make regular payments
Prove that you have a consistent source of income, by staying with the same employer for an extended period of time

If you don’t have a strong Canadian credit rating, you can also use your credit rating from a Commonwealth country, such as the United States, the United Kingdom or Australia.

Save for a Down Payment

As you’re building your credit, you can also start saving a down payment for your home purchase. If you are new to Canada and you have permanent resident status, you have to put down at least 5% of the purchase price. If you’re a non-permanent resident, you will need to put down at least 10% of the purchase price.

If you're buying a home with a purchase price of $500,000 or more, the minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000. This rule applies regardless of your residency status.

Choose Your Mortgage Amortization Period

Your amortization period is the amount of time it will take to pay off your entire mortgage. As of July 9th, 2012, the maximum amortization period for mortgages that require mortgage default insurance is 25 years. If you can put down more than 20% of the purchase price, you may be able to get a longer amortization period – up to 30 years, from most lenders. A longer amortization period will reduce your monthly mortgage payments by spreading them out over a longer time frame, but will result in more interest being paid over the life of the mortgage.

Choose Between a Fixed Rate vs. a Variable Rate

The final decision you will need to make is which type of mortgage rate you want: a fixed rate or a variable rate. A fixed mortgage rate means your mortgage rate and payment will stay the same throughout your mortgage term, whereas a variable mortgage rate means your rate (and therefore your payment) is attached to Prime rate and may fluctuate throughout your term. The decision to go fixed vs. variable is personal, and is often based on your unique tolerance for risk and whether you think interest rates will go up or down in the future.

Alternative Credit Supporting Documentation

If you’re new to Canada and have a weak Canadian credit history, you’ll need to provide some specific supporting documents to show you have built up credit other ways. Some of the documents you may need to provide include:

A valid work permit or landed immigrant status
Proof of income through either an employment contract or pay stubs
Proof of 12 months of rental payments and/or a confirmation letter from a landlord
Regular payments towards utilities, telecommunications, insurance, etc. and/or confirmation letter from service provider(s)
Letter of reference from a recognized financial institution
Several months of bank statements
Documented regular savings for 12 months
An international credit report

Gathering this information beforehand will help streamline the mortgage application process.

Calculating Your Mortgage Default Insurance Premium

In Canada, if you put down less than 20% of the purchase price of your home, you would be taking on a high-ratio mortgage. High-ratio mortgages require mortgage default insurance, which protects the lender in case you can’t make your mortgage payments and default on your loan. If you put down 20% or more, you won’t need to purchase mortgage default insurance, so you can move onto the next step. But if you’re putting down between 5-19.99%, here’s how you can calculate your premium.

In Canada, there are three providers who offer mortgage default insurance through their own New to Canada Programs: CMHC, Genworth Financial and Canada Guaranty. CMHC is the most popular of the three, but all of them offer the same premium rates, as seen below.

Down Payment (% of Home Price): 5% - 9.99%
Premium % on Loan Amount: 3.60%

Down Payment (% of Home Price): 10% - 14.99%
Premium % on Loan Amount: 2.40%

Down Payment (% of Home Price): 15% - 19.99%
Premium % on Loan Amount: 1.80%

Down Payment (% of Home Price): 20% - 24.99%
Premium % on Loan Amount: 1.25%

Down Payment (% of Home Price): 25% - 29.99%
Premium % on Loan Amount: 0.75%

Down Payment (% of Home Price): 30% - 34.99%
Premium % on Loan Amount: 0.60%

Select Your Mortgage Term

Your mortgage term is the amount of time you commit to one mortgage rate and one set of conditions with your lender. Mortgage terms are between 6 months and 10 years, with 5 years being the most common. When your term is up, you will need to negotiate a new term on the remaining principal, with a new mortgage rate and new conditions. You will likely have many mortgage terms throughout your amortization period. Just remember to choose each mortgage term carefully; breaking your mortgage term early could result in a very expensive prepayment penalty.

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