How Does The New To Canada Mortgage Program Work?

The New to Canada Mortgage Program allows qualified individuals who are relocating to Canada to purchase a home with as little as 5% down. Properties cannot have more than two units, and the owners must live in one of them. This includes both existing properties and new properties that are covered by the New Home Warranty Program.

Homes that qualify must be in areas that show a re-sale demand and are marketable. They must also have at least 25 years of economic life remaining, so very old homes will not qualify.

How To Qualify

To qualify, a borrower must have immigrated or relocated to Canada within the last 60 months. They must also be able to prove that they have been employed full-time in Canada for a minimum of three months, unless they moved under a corporate relocation program. These applicants are exempt. All applicants must have a valid work permit or landed immigrant status.

This program offers an exceptional opportunity as there are no minimum income requirements. Some amortizations may be as long as 40 years for qualified participants. The minimum down payment of 5% must be from the applicant’s own sources, unless gifted by a family member or sponsored by a corporation. Calculations regarding debt for the applicant will include all commitments outside of the country, but they do not include rental income from foreign sources. Guarantors and foreign diplomats are not permitted in the application process.


Documentation Required

Normally, applicants must provide extensive documentation, including a copy of the Purchase and Sale Agreement, confirmation of income, confirmation of down payment and a letter of reference from a recognized financial institution. However, there is flexibility for those with a limited credit history and alternative documents can be used to qualify. Some applicants may use six months of bank statements from their primary account and an international credit report demonstrating a strong credit profile. Others may qualify by providing two alternative sources of credit demonstrating that payments were made on time. These may be proof of rental payments confirmed via letter from the landlord and copies of bank statements as well as one other source, such as hydro/utilities, telephone, cable, cell phone or auto insurance. This must also be confirmed via letter from the service provider or the applicant can provide twelve months of billing statements. All proof of credit must be obtained from a Canadian source.

Get Expert Help

For those that are interested in this program, it is highly advisable that you visit a qualified mortgage broker who can discuss your needs and the requirements of the program. They will work with you towards mortgage “preapproval”. This includes collecting all of the necessary paperwork and checking your credit file so there are no unwelcome surprises when you find a home you want to buy. They will also make sure that you get the best possible interest rate and terms that qualify for the New to Canada Mortgage Program. Brokers find mortgage financing from many more sources than just those of the big banks and they can often match or exceed anything that they offer. Whether you want a fixed, variable, or adjustable rate mortgage, brokers can help to find the product that suits you and your lifestyle and help you through the process of accumulating the paperwork you need to qualify.

About CMHC

Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency. Established as a government-owned corporation in 1946 to address Canada’s post-war housing shortage, the agency has grown into a major national institution. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.


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