How to Get a Mortgage When You’re New to Canada (And Where to Start)

I got a call a while back from a man named Raj. He’d just landed in Toronto from India with a work permit, a job in tech, and a dream of buying a home for his family. But every time he talked to a bank, he hit the same wall: "You don't have a Canadian credit score. Come back in two years."

Frustrating? Absolutely. Unusual? Not at all.

If you’re new to Canada—whether you're in Ontario, Alberta, B.C., or Quebec—you're likely hearing the same thing. The good news? There are options. Plenty of them. You just need to know where to look and how to prepare.

Whether you’re a landed immigrant with a work visa, a permanent resident, or a Canadian citizen returning after years abroad, different situations will require different down payment amounts, mortgage terms, and documentation. Let’s break it down by province and circumstance.

What Every Newcomer Needs (The Basics Across Canada)

First, let's cover what all borrowers seeking standard financing (what we call "triple A" or A-lender mortgages) will be required to provide, no matter where you live:

• Proof of Employment: An employment letter outlining your salary, position, and status (permanent, contract, etc.).

• Proof of Down Payment: Bank or investment statements showing 90 days of history on the down payment funds. These funds can be in another country, but the bank statements may need a certified translation.

• Proof of "Alternative" Credit: Since you likely don't have a Canadian credit score yet, lenders will look at:

  • A landlord reference letter.

  • Monthly bank statements showing you've paid rent on time.

  • Proof of on-time payments for utility bills, telephone, cable, or insurance.

Rules by Residency Status (And How They Apply in Each Province)

Your specific status in Canada changes the rules slightly. Here’s how it works, and it's generally consistent from B.C. to Quebec.

Work Permit Holders

• Key Requirement: An active work permit. If your permit is expiring soon, proof of an extension application or your application for permanent residency can be used.

• Down Payment Rule:5% of the required down payment funds MUST come from your own resources. In most cases, these funds must be in a Canadian account for at least 30 days. The rest of the down payment can be a gift from a close family member.

Permanent Residents

• Key Advantage: Permanent Residents are not required to show that 5% of the down payment comes from their own resources. You can use 100% gifted funds for your down payment, as long as you have a gift letter from a family member.

• Credit History: You'll still need to establish "alternative credit" as mentioned above, unless you've had time to build a Canadian score.

What If I'm Moving to Canada Without Employment?

This is a common scenario for retirees or those moving here before securing a job. It's also the same across all provinces.

If you’re arriving in Canada and have not yet secured employment, you are still able to purchase a home if you can meet these stricter requirements:

1. 35% Down Payment: You'll need a minimum down payment of35% of the purchase price.

2. Reserve Funds: You must have at least 12 months of principal, interest, and property tax payments sitting in a Canadian bank account (in addition to your down payment).

We have several lender partners across the country that will work with us to put together what’s called a "non-conforming" mortgage product for this scenario. These mortgage products come with slightly higher rates and may require a 1% lender fee, but they make homeownership possible immediately.

Given the strong rental markets in cities like Toronto, Vancouver, Calgary, and Montreal, many of our clients prefer to purchase a home and start building equity in a property immediately, rather than paying rent to someone else.

Case Study: Maria in Vancouver

Let me give you a real example.

Background: Maria moved from the Philippines to Vancouver on a work permit. She had a great job as a nurse, a solid employment letter, and a 10% down payment saved up. The bank she walked into said no because she had no Canadian credit score.

Solution: We gathered her alternative credit—12 months of on-time rent payments via bank statements, her paid utility bills, and a reference from her landlord. We matched her with an A-lender who has a specific "New to Canada" program. Because she had the 5% from her own savings and a strong employment letter, she qualified.

Outcome: Maria bought a two-bedroom condo in Surrey. She stopped paying rent and started building equity. She now has a Canadian credit card and is on her way to an even stronger financial future.

Provincial Nuances to Keep in Mind

While the federal rules for residency are the same, your local market conditions can impact your strategy:

• Ontario & B.C.: In high-cost markets like Toronto and Vancouver, the biggest challenge is the purchase price. Your down payment (even at the minimum 5-10%) needs to be substantial. The "35% down no-job" program becomes critical for some.

• Alberta: With a more affordable entry point in cities like Calgary and Edmonton, many newcomers find it easier to qualify with a standard work permit and 5% down from their own resources.

• Quebec: The language of your documents matters. Ensure any foreign bank statements or employment letters are translated into French or English by a certified translator, as required by lenders and notaries.

Common Questions from Newcomers

How do I build Canadian credit fast?
Get a secured credit card from a bank as soon as you arrive. Use it for small purchases and pay it off in full every month. After 6-12 months, you'll have a score.

Can my down payment be a gift from family overseas?
Yes. For work permit holders, 5% must be your own funds. For permanent residents, 100% can be a gift. You'll need a formal gift letter from the donor and proof that the funds were transferred to Canada.

Do I need a Canadian bank account?
Yes, absolutely. You'll need one to show your down payment funds and for the lender to set up your mortgage payments.

Let's Build Your Canadian Dream

At Spire, we’ve worked with many new-to-Canada families to help them settle into their own homes across this country. Purchasing your own home means you can begin to establish community, settle your children in their school, and start building equity from day one.

We provide services in English, French, Hindi, and Gujarati. We try our best and go above and beyond to ensure everyone is heard, no matter our language barriers, Canadian status, or financial circumstances.

If you're ready to stop renting and start owning, give us a call or fill out an application at this link. Our team will get in touch to start building a plan that suits your new life in Canada.