Loans and mortgages

Financing your Canadian property

Applying for mortgage in Canada is the same as in most countries. Each mortgage application is considered on a case-by-case basis, with Canadian residents and first-time buyers given privileges.

Loans and mortgages

Foreign banks cannot lend mortgages in Canada, so you must use a Canadian mortgage broker. Non-residents can expect mortgages to cover 65% of their purchase. Residents receive 75% on average, although this can go up to 80%.

Mortgages can have interest rates of around 6% for long-term loans. Most home owners reimburse their mortgages within 15-25 years via monthly installment payments.

If your down-payment for the property is less than 25%, you must take out a mortgage insurance through your lender.

First-time home buyers

First-time home buyers who have residency status receive extra benefits. Depending on the bank, their mortgage can cover 90-95% of the property.

The government also provides incentives: $25,000 can be withdrawn from the Registered Retirement Savings Plan towards the cost of a building or a home. If you have a spouse, you can obtain $50,000. This money is interest-free for the first 15 years. If not reimbursed in full during this period, the remainder will be taxed and treated like a loan.

Documents needed for a mortgage application

The following documents are required by most entities for a mortgage evaluation:

  • Proof of income: letter of employment including your position, how many years you have been with the company and your pay; all other assets (stocks, etc.)
  • Proof of liabilities: loans, debts, car payments, etc.
  • Social Insurance Number
  • Account number
  • Information about the house you want to buy
  • Your lawyer's contact details (to prepare the mortgage documents)

Mortgage approval normally takes one to two days after reception of all necessary documents.

Foreign banks cannot lend mortgages in Canada, so you must use a Canadian mortgage broker. Non-residents can expect mortgages to cover 65% of their purchase. Residents receive 75% on average, although this can go up to 80%.

Mortgages can have interest rates of around 6% for long-term loans. Most home owners reimburse their mortgages within 15-25 years via monthly installment payments.

If your down-payment for the property is less than 25%, you must take out a mortgage insurance through your lender.

First-time home buyers

First-time home buyers who have residency status receive extra benefits. Depending on the bank, their mortgage can cover 90-95% of the property.

The government also provides incentives: $25,000 can be withdrawn from the Registered Retirement Savings Plan towards the cost of a building or a home. If you have a spouse, you can obtain $50,000. This money is interest-free for the first 15 years. If not reimbursed in full during this period, the remainder will be taxed and treated like a loan.

Documents needed for a mortgage application

The following documents are required by most entities for a mortgage evaluation:

  • Proof of income: letter of employment including your position, how many years you have been with the company and your pay; all other assets (stocks, etc.)
  • Proof of liabilities: loans, debts, car payments, etc.
  • Social Insurance Number
  • Account number
  • Information about the house you want to buy
  • Your lawyer's contact details (to prepare the mortgage documents)

Mortgage approval normally takes one to two days after reception of all necessary documents.

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