Loans and mortgages

Financing your Canadian property

Loans and mortgages

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.

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The government also provides incentives: $25,000 can be withdrawn from the Registered Retirement Savings Plan towards the cost of a building or a home.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.

Further reading

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