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Buying a home is one of the biggest milestones for many newcomers arriving in Canada. But high home prices, strict mortgage requirements, and limited credit history can make traditional homeownership feel out of reach, especially in today’s market. That’s where rent-to-own programs come in, offering newcomers a different path to owning their first home.
Rent-to-own (also known as lease-to-own homes) lets you move into a home today while working toward buying it later. For newcomers, it can bridge gaps in credit history, savings, and home-buying knowledge, making it easier to plant roots in a new country.
In this article, you’ll learn how rent-to-own can help newcomers overcome barriers to homeownership in Canada, how the process works, and what to consider before choosing a program.
Key takeaways
- Rent-to-own gives newcomers in Canada the time and structure to gradually save for a down payment while living in the home they plan to buy
- Helps newcomers build Canadian credit history
- Provides price certainty in a rising market
- Lets you “test drive” a home and neighbourhood before buying
- Renting-to-own can be a easier path to homeownership for new immigrants to Canada
What’s rent-to-own?
Rent-to-own is an arrangement where you agree to rent a home now with the option, but not the obligation, to buy it later. Here’s how it generally works:
- Option fee or deposit: You pay an upfront amount (often 2-10% of the home’s price) that’s usually credited toward your future down payment.
- Monthly rent payments: Part of your monthly rent goes toward the purchase price of the home.
- Locked-in purchase price: You and the seller agree upfront on the price you’ll pay if you decide to buy later, often 2 to 5 years down the road.
- Right to buy: At the end of the rental term, you can either buy the home or walk away.
Rent-to-own offers security, price predictability, and the chance to save for a down payment on a house while living in the home you plan to purchase.
Can newcomers rent-to-own a home in Canada?
Yes, newcomers are absolutely allowed to enter rent-to-own agreements in Canada. There’s no law preventing permanent residents, work permit holders, or even new immigrants with valid status from participating in these programs.
However, eligibility requirements still apply. Most rent-to-own companies or private rent-to-own sellers will look at:
- Your income and employment situation
- How much you can afford for an initial deposit
- Your debt-to-income ratio
- Your ability to afford monthly payments
While newcomers may face hurdles in obtaining a traditional mortgage due to limited credit history or a short employment history in Canada, rent-to-own providers are often more flexible. They’re willing to look at your income potential and financial discipline, even if you’re still new to the country.
This makes rent-to-own a popular choice for newcomers who want to secure a home while working toward financial stability.
Tip: Looking to rent-to-own in a specific city or province? Explore our detailed rent-to-own guides by location to find tailored insights for your area.
Common challenges newcomers face in buying a home
Even financially stable newcomers often hit obstacles when trying to buy a home in Canada as an immigrant. Some of the biggest include:
- Limited credit history
Canadian lenders rely heavily on credit scores. A newcomer might have perfect credit back home but no Canadian credit file, making it hard to qualify for a mortgage.
- Difficulty saving a large down payment
Homes in many parts of Canada are expensive. It can take years to save even the minimum 5% down payment, especially while adjusting to a new cost of living.
- Employment verification
Banks often require two years of steady income history in Canada, which newcomers simply may not have yet.
- Unfamiliar housing market
Navigating bidding wars, neighbourhoods, and market trends in a new country can feel overwhelming without trusted guidance.
Read more about how to find a home in Canada for newcomers
5 advantages of rent-to-own for newcomers
Rent-to-own can help overcome the challenges of buying a home as a newcomer. Here are a few of the benefits of rent-to-own programs for newcomers to Canada:
- Builds Canadian credit history
Making your monthly rent payments on time can help show lenders you’re reliable. Some rent-to-own programs even report your payments to credit bureaus, helping you build or improve your Canadian credit score — a huge advantage when you’re ready for a mortgage.
Read more about does rent-to-own build credit?
- More time to save for a down payment
Rent-to-own allows you to gradually save for a bigger down payment. Part of your monthly rent goes into a savings account or is credited toward the future purchase price. This can help you hit the minimum 5% to 20% down payment requirements more comfortably.
- Price certainty in a rising housing market
One of the biggest risks for newcomers is trying to save for a home while prices keep rising. Rent-to-own locks in your purchase price today, protecting you from future price spikes.
- Ability to “test drive” the home and neighbourhood
Rent-to-own lets you live in the home and community before fully committing. You’ll know whether you like the schools, commute, neighbours, and amenities. If you change your mind, you’re not forced to buy.
- Smoother path to homeownership
Rent-to-own provides guidance through real estate agents, lawyers, and financial partners. You’re not left to figure it out alone, which is reassuring for newcomers unfamiliar with the Canadian housing process.
Tips for newcomers considering rent-to-own
- Learn the facts. Familiarize yourself with common rent-to-own myths and misconceptions so you can make informed decisions.
- Check your budget realistically. Use this rent-to-own payment calculator to ensure you can afford the monthly payments, including the savings portion.
- Search rent-to-own listings. Browse homes for sale in Canada that qualify for rent-to-own on our website.
- Understand all contract terms. Review what’s included in a rent-to-own contract to understand buyback prices, rent credits, fees, and what happens if you choose not to purchase.
Requity Homes is a top rent-to-own program for newcomers
If you’re a newcomer looking for a smoother path into homeownership, Requity Homes is one of Canada’s leading rent-to-own programs. We’ve designed our service to be flexible and supportive, especially for those new to the country.
Requity serves Ontario, Alberta, Saskatchewan, and Manitoba, helping newcomers secure homes even without extensive Canadian credit history. Here’s how it works:
- Get pre-qualified in as little as 24 hours — it’s free and won’t impact your credit score.
- Get full approval by submitting documents to verify your income and financial situation.
- Pick your dream home. Requity lets you choose almost any move-in ready home within their service regions, and they buy it for you.
- Requity buys the home and covers all closing costs, including land transfer taxes and legal fees.
- Move in and save. Part of your monthly payment builds your future down payment.
- Buy your home at a guaranteed price when you’re mortgage-ready, or walk away and keep your savings.
Requity offers flexibility that’s perfect for newcomers:
- No strict credit score requirements. They focus on your financial potential.
- Support for self-employed or gig workers. Your income type doesn’t automatically disqualify you.
- Price certainty. Your future home price is locked in from day one.
- Stability. You won’t face sudden eviction or home sales.
Requity also provides helpful rent-to-own calculators to estimate monthly payments, and their team speaks several languages, including English, Mandarin, Tagalog, Russian, Twi, Fante, and Hindi, ensuring newcomers feel comfortable and informed.
If you’re serious about owning a home in Canada but feel locked out of the traditional process, Requity Homes offers a practical, supportive solution to get you there.
Get pre-qualified with Requity Homes today and start your journey toward homeownership.
Frequently asked questions (FAQs) about rent-to-own homes for newcomers
Can newcomers qualify for a mortgage after rent-to-own?
Absolutely. Many newcomers use the rent-to-own period to build credit, save more, and demonstrate stable income, making them stronger mortgage applicants.
Is rent-to-own safe for newcomers?
Yes! Rent-to-own is a safe option if you choose a reputable provider like Requity Homes.
Can newcomers to Canada apply for a mortgage?
Yes, newcomers with permanent residency, work permits, or refugee status may qualify for a mortgage in Canada. Most lenders offer dedicated newcomer mortgage programs that take your immigration status and limited Canadian credit history into account.
What is a newcomer mortgage program?
A newcomer mortgage program is designed to help recent immigrants or temporary residents qualify for home financing. These programs often offer flexible requirements for credit history, employment, and down payments. Major banks like TD, RBC, CIBC, and Scotiabank have newcomer-specific options.
How much down payment do newcomers need to buy a home in Canada?
Most newcomers need a minimum 5% down payment for properties under $500,000. However, without a strong Canadian credit profile, some lenders may require a larger down payment — often 10% to 20%.
Can I get a mortgage in Canada without a credit history?
Yes, some newcomer mortgage programs accept alternative proof of creditworthiness, such as rent payment records, utility bills, or an international credit report. Still, building a Canadian credit score will improve your options.
What is the best mortgage for newcomers in Canada?
The best mortgage will depend on your immigration status, employment type, and financial history. Programs like RBC’s Newcomer Advantage, TD’s New to Canada, and CIBC’s Newcomer Mortgage Program are popular for their flexibility.
What is the CMHC newcomer mortgage program?
The Canada Mortgage and Housing Corporation (CMHC) allows eligible newcomers to qualify for insured mortgages with as little as 5% down. You must have permanent resident status and meet income and credit guidelines.
What’s the difference between renting and rent-to-own for newcomers?
Renting is a short-term housing solution without ownership rights. Rent-to-own lets you rent a home with the option to buy it later, helping you save for a down payment while building credit — ideal for newcomers not yet mortgage-ready.
How can I find a home to rent as a newcomer to Canada?
Start by browsing rental listings on sites like Realtor.ca, Rentals.ca, or contacting local settlement agencies. Rent-to-own providers, like Requity Homes, offer another path to access stable housing while working toward ownership.
Is the First-Time Home Buyer Incentive available for newcomers?
Yes, permanent residents and non-permanent residents legally authorized to work in Canada may qualify for the First-Time Home Buyer Incentive, a shared equity program that reduces your mortgage payments without adding interest.
How do I qualify for a mortgage as a newcomer in Canada?
You’ll typically need:
- Valid immigration status (PR, work permit, refugee claimant, etc.)
- Proof of income (employment letter, pay stubs, or business records)
- Down payment (minimum 5%, or more if your credit profile is limited)
- A reasonable debt-to-income ratio
- Possibly a Canadian bank account and savings history
Which banks offer newcomer mortgage programs in Canada
Leading lenders include:
- RBC Newcomer Mortgage
- TD Canada Trust New to Canada Program
- CIBC Newcomer Mortgage
- Scotiabank StartRight Program
