Can non-residents get a mortgage in Canada?

  • Asked By
  • Updated On:
  • Replies:

Short Answer

Yes, it is possible for Non-resident Canadian citizens, Non-resident foreigners and Non-residents who are planning to move to Canada, to get a mortgage approved from Canadian financial institutions to purchase a property.

Detailed Answer

Who are Non-residents in Canada?

You are considered as a non-resident in Canada if you routinely live outside of Canada or if you live outside Canada throughout a tax year or if you stay inside Canada for less than 183 days in a particular tax year.

What is a Mortgage?

Mortgage is a loan that is taken to purchase home or any other investment property. The property itself is used as a collateral for the loan. The interest rate may be fixed or variable and the loan term goes until 30 years depending on the age and creditworthiness of the borrower.

Can non-residents get a mortgage in Canada?

The Canadian Real Estate Association reported that, the average cost of purchasing a home in Canada is nearly $605,000 in the year 2022. The price range has increased by 17% from the previous year. Hence, mortgage has become a main source of funding the property purchase.

It is possible for non-residents to obtain mortgage from Canadian financial institutions, but the stringent rules that are followed:

  • You might be asked to come down to Canada for the application approval process
  • Strict identification process
  • Higher fixed interest rate
  • Higher down payment
  • Additional costs

What are the down payment rules for non-resident mortgages in Canada?

  • If you are a resident of the United States, then you must fund at least 20% of the home value as the down payment.
  • If you are living anywhere outside of Canada and the United States, then you must have at least 35% down payment.
  • It is to be noted that the down payment amount must be available in one of your Canadian bank accounts before applying for the mortgage. It must be your money and not be a gift.

What are the additional costs incurred by non-residents for taking mortgage in Canada?

  • Speculation tax for non-residents
  • Provincial and municipal transfer tax on real estate
  • Sales tax levied on mortgage insurances
  • New construction taxes

What are the Identification documents required to obtain a non-resident mortgage in Canada?

  • Proof of income such as employment agreement, pay slips etc.
  • Bank statement for 3 months
  • A letter of reference from your home banker
  • Six months financial statements
  • International credit report
  • A Canadian bank account

Mortgage for Non-residents of Canada

Thus, it is possible for Non-residents of Canada to get a mortgage approved and purchase their desired investment property. Before applying for the loan,iIt is important for you to ascertain the loan interest rate, how different it is from the standard interest rate, if you are required to be present in Canada, bank processing fees, down payment rate and how long it needs to be in your Canadian bank account.

Tagged With: non resident canadaapply canada mortgagemortgage in canadanon resident mortgage canada
Categories: Mortgage
Ask Your Query for FREE, Get quick answers from our FINTRAKK community!
Discussion (0)
Related FAQs
Can a Non-Resident Open a Brokerage Account in Canada?

At present, the potential to open a brokerage account in Canada, while being a non-resident is complicated and has numerous terms and conditions. This varies from broker to broker. To become savvy in this topic, continue reading.

Can a Non-Resident Open a Bank Account in Canada?

Yes, you can open a bank account in Canada even though you are a non-resident, given that you are able to substantiate your identity with reliable documents such as your SIN, passport, driver's license, etc.,

What are the best Wealthsimple alternatives in Canada?

There are various online brokerage platforms in Canada. We believe that Questrade, Scotia iTrade and CIBC investor's edge are the best alternatives to Wealthsimple.

How to invest in the Indian stock market from Canada? Explain with the help of an example.

There are various steps for Canadian NRI to invest in share market in India. Let's figure out how to invest in Indian stock market from Canada.

Which is the first company to start real-time rail payments in Canada?

Wealthsimple is the first company to get access to real-time rail payments in Canada, which is neither a bank nor a credit union. However, it is yet to go live in Canada.

Who is eligible for GIC in Canada? What are the types of GIC?

"GIC" stands for Guaranteed Investment Certificate and is a type of investment product offered by financial institutions in Canada. Eligibility for GIC in Canada typically requires individuals to be at least 18 years old and have a Canadian address. It is important to carefully review the terms and conditions of a GIC before investing.

How to start investing with 100 dollars in Canada?

There are many ways in which you can invest $100 such as robo advisor platform, fractional shares, ETFs, managed funds, crypto currency, etc. Let's discover and discuss different ways of investing an amount of 100 CAD in Canada.

Which is the best bank for GIC in Canada for international students? How many banks in Canada provide a GIC option?

Our analysis suggests that CIBC is one of the best bank for GIC in Canada for international students. Learn why it is the top bank for GICs and the alternatives available.

Do you pay taxes on RRSP after age 65 in Canada?

Yes, if you retire by age 65 and you withdraw funds from your RRSP, such funds will be taxed at your marginal tax rate. For more details, go through the points listed here.