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A Mortgage Primer for Newcomers to Canada
07 February 2011

The growth and success of Canada has always been based partly on our belief in a strong immigration program.  We celebrate our differences and encourage people to come to our shores to be part of our great nation without losing sense of who they are.  This welcome attitude attracts a hard working and tolerant mix of cultures all striving to prosper and flourish wherever they call home.   Even in these troubled times where all around the world immigration is under attack "Canadian attitudes are by far the most positive among all countries surveyed," think-tank analyst Delancey Gustin told Postmedia News.  Our banks and our government believe that all Canadians should have an opportunity to own a home and have programs in place to help make that happen.


CMHC (Canadian Mortgage Housing Corporation) is one of the organizations that provide default insurance to the lenders in Canada, in essence allowing lenders to provide mortgage financing for newcomers with as little as 5% down payment while assuming the risk of mortgage default.  In their own words “Newcomers to Canada play an increasing role in Canada’s future population growth, creating new market opportunities.”   CMHC and Genworth both play their part in paving the way for homeownership.    


When immigrating to a new country it is expected that a local credit bureau and work history not be available for review by the lenders.  As these two points are major pillars of our lending criteria it goes to say that without a special program there is no way to get a mortgage unless you have been in Canada for 2 years to establish both your credit and employment history. Along comes our Newcomer programs that apply to permanent residents who have relocated here less than 36 months and non-permanent residents of Canada.  There is no minimum period of residency but it is expected that after 3 years in the country one should have established some credit on our shores and have a stable work history.


In lieu of the local credit history a foreign credit bureau is an acceptable proof of an applicant’s ability and willingness to pay, both EQUIFAX: or TRANSUNION: may be contacted to provide credit scores. Equifax operates in 14 countries through North America, Latin America and Europe but may not provide personal credit information for all those countries.  Other countries credit reports can be reviewed as well but if no credit bureau is available then alternate forms of payment history can be reviewed; 12 months of rental payments, utility bills, child care, insurance, even documented regular savings or a bank reference letter will go a long way in showing that an applicant is fiscally responsible.


Income is still required to qualify and standard affordability ratios still apply but requirements for long term job stability are not a part of the equation.  You cannot be currently on work probation so after 3 or so months on the job you are eligible for the program.  You must also have a valid work visa and be eligible to work in Canada.  It would be nice to be in the same field here in Canada as the country you emigrated from and being transferred by a corporate relocation program will even exempt you from the 3 month requirement.  Other sources of income are also acceptable; pension, disability, and investment income included.  Debts abroad are still calculated as debts when determining affordability so monthly payment obligations will be calculated along with any here in Canada.


Down payment must be from own funds and should be in Canada before they are required for down payment.  Gifts from close family can also be part of the equation but should also be on deposit here in your name before closing.  Verification of down payment is usually requested and a 90 to 180 day proof of ownership could be a requirement by the lender.  Secondary financing is not an acceptable form of down payment.


As this is a primer to the newcomer program there are going to be small exceptions and slightly differing guidelines between lenders and insurers so please speak to a Licensed Mortgage Agent when thinking of applying.  Your best tool is knowledge and experience in the field for this and all mortgage programs. 



Abraham Niyazi

Mortgage Agent



Centum One Financial Group Inc.

Lic#     10758

Cell:     416-993-4082

Office:  1-866-RATE-708

Fax:      1-877-EASY-919



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