As a Non-Canadian or Non-Permanent Resident, There Are Mortgage Options for You
Although recent mortgage regulations and taxes have made it more difficult and expensive to purchase and refinance Canadian real estate, there are still lending options for non-residents. A non-resident is generally someone who does not reside in Canada for tax purposes, including foreign nationals, expats, and international investors.
As for temporary Canadian residents on work permits or study permits who are physically living in Canada, they can generally qualify for a mortgage the same way a permanent resident would. They may only need to show that they have applied for permanent residency. If you’re in this category, let me know and we’ll look at the right options for your situation.
Down Payment Requirements for Non-Residents
Because non-residents have less ties to Canada than a resident, the lenders are primarily lending on the property’s security. This means you will typically need to have a down payment of 35% or more for most situations.
- Minimum 35% down payment required by most lenders
- The 35% applies to the purchase price, not the appraised value
- Down payment must be verified as coming from a legitimate source
- Foreign income can be used to qualify, but must be documented and often converted at a haircut
- Canadian credit history is not required, but foreign bureau reports may be requested
The Foreign Buyer’s Tax in BC
British Columbia imposes an Additional Property Transfer Tax (commonly called the Foreign Buyer’s Tax) on residential properties in designated areas including Metro Vancouver, the Capital Regional District, and several others. As of current legislation, the rate is 20% of the purchase price for foreign nationals and corporations controlled by non-residents.
This is a significant additional cost to factor in before you make an offer. There are some exemptions available, and I’ll walk you through whether any apply to your situation so you understand the full cost of the purchase before proceeding.
Purchase With as Little as 20% Down
I have contacts at institutional lenders (banks) that can use USA-earned income to qualify for a Canadian mortgage at competitive rates and with as little as 20% down payment. This benefits both American citizens looking to buy in Canada as well as Canadian expats in the USA who are no longer Canadian residents for tax purposes.
I also have many private lenders that lend on property equity or down payment and do not income-qualify, so non-residents aren’t challenged with proving income to secure a mortgage.
Which Lenders Work with Non-Residents?
Not all lenders in Canada will work with non-resident buyers. The major chartered banks have programs, but the terms vary and they often don’t advertise them. There are also specialty lenders and private lenders who work with non-residents specifically, sometimes with more flexible income documentation requirements.
I know which lenders in my network are non-resident-friendly, what documentation they need, and how long the process typically takes. If you’re purchasing from abroad, the earlier you contact me the better. Please proceed to my contact page to start the conversation - tell me about your specific scenario so I can find the best mortgage for you.