New to Canada Mortgage Options – Available to New Immigrants in Canada

New to Canada Mortgage Options – Available to New Immigrants in Canada

If you have just immigrated or relocated to Canada and qualify for Genworth’s New to Canada program, you can buy property in your new home country for a down payment for as low as 5%. You can still make mortgage work for you if you are new to Canada. Read ahead for all the information you need:

Conditions for Getting a Mortgage in Canada if you are an Immigrant

There are various conditions that must be met in order to be eligible for a mortgage. Here are some of them:

Property Value and Down Payment

  • The minimum down payment of 5% is only applicable on first mortgages.
  • The property you buy must be worth below $1,000,000.
  • The amortization period should be 25 years.
  • You can get a loan-to-value limit of 95% of your purchase transactions.
  • In case the property is worth less than $500,000, you’ll pay a down payment of 5%.
  • In case the property is worth between $500,000 and $1,000,000, you’ll pay 5% down payment on the first section of the loan up to $500,000. As for the balance amount above $5,00,000, you’ll pay a down payment of 10%. So be ready for higher mortgage payments if the house is worth more.
  • To make the down payment of 5% for the mortgage, you must use your own personal sources like your savings or the funds you raise from the sale of any personal property.
  • If you’re making payments of more than 5% towards the mortgage, you can pay the balance by taking non-repayable gifts from immediate family members.

Learn more about the mortgage approval process.

Immigrant Status in Canada

  • You should have officially migrated or moved to the country in the last 5 years.
  • You cannot have guarantors backing you.
  • You should not be a member of a foreign diplomatic team in the country. If you don’t pay taxes, you cannot qualify for the program.
  • You must possess a valid work permit or status of a landed immigrant.
  • If you owe any debts outside of Canada, they’ll be calculated in the total debt servicing ratio.
  • If you earn rental income outside the country, it is not included in the 39% GDS or 44% TDS calculation.

Not All Properties Qualify for the New To Canada Program

Not all properties qualify for Genworth’s New to Canada program. Here are the criteria:

  • The property must have a maximum of 2 units of which one should be occupied by the owner.
  • The property should be an existing resale house.
  • The property should be located in a residential area with a re-sale high demand so that it can be easily sold.
  • The property should be a new construction secured by a New Home Warranty Program approved by the lender.
  • According to property appraisal experts, it should have a projected economic life of at least 25 years.

Terms and Interest Rates on the New To Canada Mortgage

  • You can choose from different kinds of mortgages like fixed rate, capped variable rate, standard variable rate, and adjustable mortgage rates.
  • The interest rates can have a term of 25 years at most.
  • The interest rate is chosen from the contract rate or 5-year benchmark rate, whichever is higher.

Calculating Premium Rates

You’ll pay the insurance premium at the time of closing and it can be added to the mortgage. This amount is non-refundable and as you can see from the table below, rates are calculated on the top-up section on the additional loan amount or the total new loan amount, whichever is lower.

LTV Ratio Premium Rate Top-Up Premium
Up to 65% 0.60% 0.60%
65.01% – 75% 1.70% 5.90%
75.01% – 80% 2.40% 6.05%
80.01% – 85% 2.80% 6.20%
85.01% – 90% 3.10% 6.25%
90.01% – 95% 4.00% 6.30%

Qualifying for the New To Canada Mortgage:

To qualify for the mortgage, here are the criteria you must meet:

  • Unless you’re moving to Canada under a corporate relocation program, you must prove that you have been employed in the country full-time for at least 3 months.
  • You must submit the standard proofs of income and employment to apply.
  • Genworth Canada needs lenders to submit a copy of the documents on a case-by-case basis in place of providing the documents upfront with every file.
  • The landlord must provide a proof of rent receipt that includes the name of the lessee, rent amount, payment history, and time for which the property was rented. You must also submit bank statements that prove that the rent payments were made on time along with the amount of rent.

Submitting Documents and Other Information

Loan to Value in % age Documents Needed
Any Loan to Value ●     Verified landed immigrant status or valid work permit

●     Confirmation of down payment

●     Confirmation of income

●     Purchase and sale agreement

Loan Value of 0% to 90% Primary bank account statements dating back 6 months/ Reference letter from a recognized bank or financial organization
Loan Value of 90.01% to 95%  

International Credit Report showing a robust credit profile/ Any 2 documents showing that you have been making regular payments towards your dues without delays in the last 12 months. You can submit any 2 of these documents provided by a Canadian source:

●     Proof of rent payment such as bank statement or letter from the landlord

●     Proof of bill payments over 12 months for cell phones, cable TV, hydro/utilities, or auto insurance

Other Information:

  • As a home buyer, you can avail of the positives of a lender’s portability. That’s because of the portable status of the mortgage default insurance. You can get further information at the Portability Feature Product Overview.
  • If you meet the lender guidelines, mortgage is assumable.

Products that Qualify Under the New to Canada Program

  • Homebuyer 95 Program
  • Purchase Plus Improvements Program
  • Progress Advance Program

Products that Don’t Qualify Under the Program

  • Borrowed Down Payment Program
  • Vacation/Secondary Homes Program
  • Second Mortgage Program
  • Family Plan Program
  • Investment Property Program
  • Business For Self (Alt-A) Program