Mortgages for Foreign Buyers in Canada

A foreign buyer mortgage in Canada is a residential mortgage for someone who is not a Canadian citizen or permanent resident — a non-resident, a temporary resident on a work or study permit, or a newcomer with no Canadian credit history. Canadian banks, credit unions and mortgage finance companies do lend to foreign buyers, but expect a larger down payment, closer income scrutiny, and no access to CMHC mortgage default insurance in most cases.

Who Counts as a Foreign Buyer

The label means different things depending on who is asking.

• For federal tax and ownership rules: a non-Canadian generally means someone who is not a Canadian citizen, a permanent resident, or a person registered under the Indian Act. Temporary residents can land on either side of the line depending on their permit and how long they have been in Canada.
• For mortgage lending: lenders care less about your passport and more about where your income, credit file and down payment come from. A permanent resident paid in a foreign currency may still be underwritten like a non-resident, while a work-permit holder earning Canadian dollars may qualify close to standard terms.

If you are buying from abroad without Canadian status, read our companion guide to mortgages for non-residents — the two files overlap almost completely.

The Federal Prohibition on Non-Canadian Purchases

The Prohibition on the Purchase of Residential Property by Non-Canadians Act limits non-Canadians from buying residential property in Canada. It applies in census metropolitan areas and census agglomerations and it carries a list of exemptions, which can include certain work-permit holders, international students who meet conditions, refugees, and some spouses or common-law partners of Canadians.

The prohibition has an expiry date and has already been amended once, so confirm the current status, exemptions and penalties with the Department of Finance Canada or on Justice Laws before you make an offer. Breaching the law can lead to substantial fines and a court order to sell the property.

No CMHC Insurance — What It Means for Your Down Payment

Government-backed mortgage default insurance from CMHC, Sagen or Canada Guaranty is generally limited to borrowers who are Canadian citizens, permanent residents, or non-permanent residents legally authorized to work in Canada. Most foreign buyers therefore need an uninsured mortgage, and that changes the math:

• You need at least 20% down, and lenders frequently ask for 25% to 35% on foreign-income files.
• Uninsured mortgages typically carry higher pricing than insured ones, because the lender absorbs the default risk. Variable pricing is usually tied to the lender's prime rate, which moves with the Bank of Canada policy rate, so ask for a current quote rather than assuming a number.

Registered programs such as the RRSP Home Buyers' Plan and the First Home Savings Account are built around Canadian tax residency, so they typically won't help a non-resident buyer.

How Lenders Underwrite a Foreign Buyer File

Federally regulated lenders follow OSFI Guideline B-20, which requires verified income, a documented down payment source, and a realistic assessment of your ability to pay. You also have to clear the federal mortgage stress test: qualification is based on the higher of your contract rate plus two percentage points, or the published qualifying-rate floor. Confirm the current floor with OSFI or your lender, and see the Canadian mortgage stress test explained.

Beyond that, expect lenders to look closely at:

• Income: foreign employment or business income is accepted by many lenders, usually with certified translations and notarised copies.
• Credit: with no Canadian credit file, lenders may use an international credit report, reference letters from your bank abroad, or lean harder on your assets and net worth.
• Down payment: funds usually must be verifiable and seasoned in an account for a set period; gifted money normally requires a signed gift letter.
• Ratios: most lenders aim for a GDS ratio near 39% and a TDS ratio near 44%, and some hold foreign-income files to tighter limits. Our explainer on GDS and TDS ratios shows how the math works.

Here is how a foreign buyer file typically differs from a domestic one.

Requirement	Canadian resident borrower	Foreign buyer / non-resident file
Minimum down payment	As little as the insured minimum, where the borrower qualifies	At least 20%, often 25% to 35%
CMHC default insurance	Available if eligibility criteria are met	Generally unavailable
Income proof	Canadian pay stubs, T4s, notices of assessment	Foreign income documents, translations, sometimes a net-worth program
Credit history	Canadian credit bureau report	International report or bank references
Mortgage stress test	Applies	Applies

Extra Taxes and Costs Foreign Buyers Often Face

Budget well beyond the purchase price. Several provinces levy an additional land transfer tax or speculation tax on foreign buyers, and some municipalities add their own. Ontario, British Columbia and Nova Scotia are the best-known examples, but rates, thresholds and exemptions change, so confirm the current rules with the province or city before you waive conditions. Our guide to land transfer tax in Canada explains how the base tax is calculated.

You may also run into:

• Standard land transfer tax, including Quebec's "welcome tax", on top of any foreign buyer surcharge.
• GST/HST on a newly built home.
• Vacancy or speculation taxes in parts of British Columbia and Ontario if the property sits empty.
• Canadian tax filing and withholding obligations if you rent the property out as a non-resident — check the CRA's rules for non-residents.
• Currency conversion costs and cross-border transfer fees on your down payment.

Documents a Foreign Buyer Usually Needs

Expect a longer checklist than a domestic buyer. The documents for a Canadian mortgage application generally include proof of identity and immigration status, income documentation from your home country (translated and notarised where required), recent bank statements showing the down payment, a signed gift letter if funds are gifted, a Canadian bank account for withdrawals, references or an international credit report, the purchase contract, and proof you can cover closing costs.

How to Shop for a Foreign Buyer Mortgage

Start with a mortgage pre-approval so you know your realistic budget before you shop, and work with a broker or lender who handles non-resident files regularly — not every bank does. Compare at least three options, and ask each one directly about the rate, lender fees, appraisal costs, prepayment terms and the interest rate differential (IRD) penalty if you break the mortgage early. If the big banks decline, credit unions, monoline lenders and private mortgage investment corporations are alternatives, though private lending usually costs more. No lender can promise approval, so get your paperwork in order and confirm every figure in writing.