New To Canada Home Buyers

Buying a home can be a challenging experience for anyone, but it can be especially difficult for new immigrants to Canada. A lack of Canadian credit history or employment history can make it difficult for banks to approve a mortgage loan. 

However, many banks and lenders offer newcomer mortgages to help new immigrants get settled into their own homes. This article will look at newcomer mortgages, how they work, which banks offer them, and the requirements to qualify for a newcomer mortgage.

What is a Newcomer Mortgage?

A newcomer mortgage is a special mortgage program offered by some banks in Canada for new to Canada home buyers. They are designed to help newcomers get a mortgage even if they don’t meet the eligibility requirements for a regular mortgage. Banks like to see that you’ve been employed for at least the last 3 months in Canada.

Having a work history shows that you have a stable level of income. A bank will also look at your credit report to see how you have been handling debt. This includes a history of payments, such as whether or not you have missed any payments or made late payments, along with your balances and credit limits.


For those new to Canada, you might not have a work history and credit history in Canada. With a newcomer mortgage program, banks are more lenient on their eligibility requirements.

However, you will need to meet certain criteria in order to be considered a newcomer to Canada. Mortgages for those new to Canada can be insured against mortgage default by the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty.

In order to be eligible for a newcomer's mortgage, you must have immigrated to Canada within the last 5 years. You must also have legal status in Canada, which means that you should be a permanent resident/landed immigrant or a non-permanent resident with a work permit. You will need at least three months of full-time employment history in Canada unless you are being relocated to Canada by your current employer.

You will need to make a down payment of at least 5%. This minimum down payment requirement can be higher, such as if the home price is over $500,000. Your lender can require the minimum down payment to come from your own resources and savings, rather than being gifted or borrowed.

Debt Ratios

Not all lenders will allow non-permanent residents to purchase a rental property in Canada. Your debt service ratio shows how much of your income goes to service your debt. The higher this ratio, the worse it is since you’re spending more of your income on service debt.

You will need to have a gross debt service ratio (GDS) of 39% or less and a total debt service ratio (TDS) of 44% or less. If you meet these basic qualifications, it’s now time to choose your mortgage lender. This could range from big Canadian banks to smaller local lenders.

You can also work with a mortgage broker to help you get a newcomer mortgage. Starting off the process by knowing how much you can afford will help you when you start looking for a home.

You don't need to settle for a home that maxes out what you can afford either. Knowing your budget will help you find a home that is a good fit for you and your family. As a newcomer to Canada, it is important to try to build your Canadian credit history as soon as possible. Some banks offer free credit cards for newcomers even if they don’t have any credit history.

Looking to buy a home in Canada as a newcomer? Look no further than Amrita Bhogal Mortgages! Our team understands the unique challenges that new immigrants face when it comes to securing a mortgage. That's why we offer a variety of mortgage options tailored to meet the needs of newcomers to Canada.

We can help you navigate the ins and outs of the mortgage application process and find the right loan for your situation, even if you have a limited credit history or employment history in Canada. Contact us today!


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