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Q&A: Financing For Non-Residents

Can a non-resident get a mortgage to purchase a Property in Canada?
Yes! Usually Canadian banks and lenders require non-residents have a minimum 35% and more often, up to 50% down payment (in other words, 35% of the cost of the home paid for in cash, with a maximum of 65% of the property value provided as a mortgage). Different banks have different non-resident mortgage rules, so you can ask up front when choosing a provider.

• A 35 - 50% downpayment (not from gifted funds)
• A reference letter from their home bank in their country 
• An employment letter verifying income in Canadian or US dollars
• Three months bank statements from their home bank
• Canadian credit check

What kind of interest rate will I get on a mortgage as a non-resident?
Non-residents are eligible for the same interest rates as Canadians, provided they meet the mortgage eligibility criteria. If you live in a country that does not have a tax treaty with Canada, you will only be eligible for a fixed-rate interest rate.

If you don’t meet the bank eligibility requirements, you may still be able to get financing from a private lender, which will be at a higher interest rate than a bank.

How long does the down payment have to be in a Canadian bank?
Most Canadian banks will require your down payment to be in a Canadian bank for 30 days before the closing of the purchase, as banks have to trace the source of your down payment going back 90 days.

What’s a deposit, when do I need it and how do I pay it?
After you’ve made an offer on a property in Canada, you’ll need to provide a deposit – usually around 5% of the purchase price within 24 hours. That deposit is held in trust by the listing brokerage and forms part of the down payment when it comes time to take possession of the property. It’s a good idea to open a Canadian bank account and have the deposit in the bank account when you start the search for a property. when you are ready to pay the deposit, they can either issue a certified cheque for you, or they can arrange to send the deposit funds via wire transfer.

What kinds of closing costs should I expect to pay?
As a non-resident, you will have to pay the 15% Non-Resident Speculation Tax and be subject to the other regular closing costs, including land transfer taxes and legal fees.

I don’t need a mortgage. How do I pay for the property?
You can buy a property without getting a mortgage if you have 100% of the funds in cash. That money would need to be transferred to your lawyer before closing on the property.

 Contact us with any questions, read more about Immigrating to Canada or examine our Buyers Agency Service.
3A®Group RE/MAX offers an exclusive Buyer's Agency where we do the searching, vetting and purchasing of homes and property to your specifications and requirements. It is fast becoming the best way to locate exactly what you want, and avoid the international travel restrictions.