Buying a home in Canada is a major milestone, but for newcomers, the process can feel complex and unfamiliar. Many arrive with dreams of putting down roots, but turning those dreams into reality requires time, preparation, and a clear understanding of how the Canadian housing market works.

This guide explains what newcomers need to know about buying a home in Canada. It includes insights on mortgage products, meeting credit criteria, and alternatives like rent-to-own. It also outlines how to work with real estate agents, mortgage brokers, and financial institutions. Whether you are planning your first home purchase or exploring different ownership paths, this resource will help you make informed and confident decisions.
Decide if buying or renting is right for you
Deciding whether to buy or rent a home in Canada as a newcomer involves several factors. Around one in five homebuyers in Canada are newcomers, reflecting a strong interest in property ownership. Many choose to rent first and then buy a home after living in Canada for about three years. This reflects the time it often takes to build credit, savings, understand the market, and prepare financially.

Consider your long-term plan. Buying is ideal if you aim to stay long-term and have savings for a down payment. Permanent and non-permanent residents can buy, but must provide proof of income and might face higher down payments.
Renting offers flexibility and lower initial costs. It might be suitable if you plan to move frequently or are still settling into Canadian life. Always weigh the benefits alongside mortgage qualifications, property taxes, and legal requirements you may face.
Tip: Consider renting-to-own a house as an alternative to renting or buying.
Understand the Canadian housing market
Before buying a home, newcomers should consider job stability, savings for a down payment, and long-term plans. Rent-to-own programs, like those from Requity Homes, can help build Canadian credit history while moving towards ownership.
Here’s a breakdown of what newcomers need to think about before buying a house in Canada:
- Financial Preparedness:
- Savings for a down payment
- Proof of income and job stability
- Credit History:
- Building a Canadian credit score
- Using rent-to-own options
- Costs of Homeownership:
- Hidden expenses and additional costs
- Property taxes and closing costs
Understanding these factors helps newcomers determine their price range and manage mortgage payments effectively. With time and preparation, newcomers can successfully navigate the Canadian real estate market and achieve homeownership.
Explore different property types
When buying a home in Canada, you’ll find several options to match your lifestyle and budget:
- Apartments/Condos: Low-maintenance units, often in buildings with shared amenities like gyms or pools. Monthly condo fees cover upkeep and common areas.
- Detached Homes: Standalone houses offering the most space and privacy, but with full responsibility for maintenance, repairs, and property taxes.
- Townhouses: Multi-level homes that share walls with neighbours. They often include smaller yards and may come with HOA or condo fees for shared services.
- Duplexes/Triplexes: Homes with two or three units. They offer rental income potential but also come with landlord responsibilities and maintenance duties.
Saving for your first home
To buy a home in Canada, you'll need at least a 5% down payment with mortgage insurance. Building savings and an emergency fund is key to handling costs like repairs and unexpected expenses.
Newcomers should focus on improving credit by using credit cards or small loans and making payments on time. First-time buyers can also claim up to $1,500 through the Home Buyers' Amount tax credit.
Banks like TD and Scotiabank offer programs for newcomers with limited credit history, helping make homeownership more accessible.
Utilizing first-time buyer programs and incentives
First-time homebuyers in Canada can benefit from various programs and incentives. Many Canadian banks and lenders offer specialized mortgage programs to help newcomers. These programs cater to those with limited credit and employment history, making home buying more accessible. For instance, the Scotiabank StartRight Mortgage Program is aimed at both permanent and temporary residents. It assists those who have been in Canada for five years or less. A key condition is that your down payment must come from your own resources.
Moreover, first-time buyers may qualify for the Government of Canada's home buyers tax credit. This incentive can be claimed when filing income taxes, providing some financial relief. TD Bank’s newcomer mortgage solution is another helpful option. It offers mortgage options that don’t require a Canadian credit history. Instead, eligibility depends on criteria like having three months of full-time employment in Canada.
Additionally, flexible mortgage payment options are available to assist buyers in managing repayments. These options let buyers adjust payment schedules according to their financial needs. By taking advantage of these programs, newcomers can find suitable pathways to homeownership in Canada.
Down payments and mortgage loan insurance
Buying a home in Canada requires planning, especially when considering down payments and mortgage loan insurance. The minimum down payment ranges from 5% to 20%, depending on the purchase price. If your down payment is less than 20%, you must get mortgage loan insurance. This insurance protects lenders if you can't pay your mortgage. The cost of insurance is between 0.6% to 4.50% of the mortgage amount. You can pay these premiums upfront or add them to your mortgage, where they'll gather interest. Major Canadian providers of this insurance include the Canada Mortgage and Housing Corporation (CMHC), Sagen, and Canada Guaranty. Larger down payments reduce your overall insurance costs.
Requirements and eligibility
Permanent residents can buy homes in Canada without extra rules. However, non-permanent residents, like those with a work or study permit, must show proof of income. They often need a larger down payment.
Newcomers without much Canadian credit history may have more limited mortgage options and may want to consider alternative options like lease-to-own or private lenders.
Non-Canadians planning to become permanent residents need to confirm their legal ability to purchase property with a lawyer.
Benefits of mortgage loan insurance
Mortgage loan insurance offers key advantages, particularly for newcomers and first-time buyers. It protects lenders if you fail to make payments, which is required when your down payment is less than 20%.
In provinces like Ontario, Manitoba, and Quebec, there's an added tax on this insurance that must be paid upfront with your mortgage. High-ratio mortgages require this insurance, which costs between 2.8% and 4.0% of the mortgage loan amount. The insurance premiums depend on the loan-to-value (LTV) ratio, with higher ratios reaching up to 4.00% for homes with LTV ratios between 90.01% and 95%.
This insurance helps those without a long Canadian credit history to prove they can manage a home loan, making home ownership more accessible.
The mortgage pre-approval process
Getting pre-approved is a key first step in buying a home. It involves submitting your financial details to a lender to estimate how much you can borrow. Pre-approvals typically last 90 to 120 days with a locked-in interest rate. While helpful for setting a budget, it doesn’t guarantee final approval, which depends on the property and further review.
Working with a mortgage broker
Mortgage specialists help newcomers compare lenders, understand mortgage terms, complete mortgage documents, and choose the best financing option. They offer tailored advice, especially useful if you have limited Canadian credit. Brokers are paid by lenders, so their services are free for buyers. Working with one can simplify the process and improve your chances of securing a suitable mortgage.
Building a good credit history
Establishing a strong Canadian credit history is crucial for newcomers as it significantly impacts mortgage approval. A good credit history helps demonstrate your financial responsibility. This is important for securing favourable mortgage rates.
Canadian lenders typically do not recognize overseas credit. So, it is vital to start building your Canadian credit as soon as possible.
One effective way to build credit is to get a Canadian credit card, like those offered in Scotiabank’s StartRight Program. This program is designed for newcomers and may not require a prior credit history. Using a credit card regularly and making timely payments is essential. This helps in building a solid credit score.
Another option is participating in rent-to-own programs. These can help you work towards homeownership while building your credit history.
Read more about how to improve your credit score
Mortgage options for newcomers
As we've seen, buying a home in Canada is a big step, especially if you're new to the country. Thankfully, there are mortgage options designed for newcomers. These programs help people who might not have a long credit history or job record in Canada.
Whether you're a permanent or temporary resident, you can find options through banks and other financial institutions that fit your needs. Many lenders accept international credit reports and alternative credit checks if you haven't been in Canada long. Some banks, such as RBC, even offer special mortgages for newcomers, taking into account overseas income and lack of Canadian credit scores.
If you don’t qualify with a traditional bank (also known as an A-lender), you may want to consider working with a B-lender. These alternative lenders, such as Home Trust or Equitable Bank, cater to borrowers with limited credit history, non-traditional income, or past financial challenges. While interest rates are often higher, B-lenders offer more flexible approval criteria, making them a viable option for newcomers still building financial stability in Canada.
Depending on your financial history and the lender's policies, you might need to make a down payment ranging from 5% to 35% of the home's price. So, whether you're a landed immigrant, temporary worker, or international student, there are mortgage solutions available to help you achieve homeownership.
Conventional vs. high-ratio mortgages
A conventional mortgage requires a down payment of at least 20% and a solid Canadian credit history. It usually offers better terms since it's seen as lower risk by lenders.
A high-ratio mortgage allows for a down payment as low as 5%, but requires mortgage default insurance, which adds 2.8% to 4.0% of the loan amount. You typically need at least two years of Canadian work history to qualify.
Choose a conventional mortgage if you have more savings and strong credit. If you need flexibility with your down payment, a high-ratio mortgage may be a better option despite the added insurance cost.
Fixed vs. variable mortgage rates
With a fixed-rate mortgage, your interest rate and monthly payments stay the same for the term, typically three to five years. This provides predictability and helps with budgeting.
A variable-rate mortgage fluctuates with the Bank of Canada's prime rate. Some plans adjust both the rate and payments, while others keep payments steady but change the interest portion.
Choose a fixed rate if you prefer stability. A variable rate may suit you if you're comfortable with risk and want to benefit from potential rate drops. Your decision should reflect your financial goals and tolerance for change.
Consulting real estate professionals
For newcomers, real estate professionals can simplify the home-buying process. Agents offer local market knowledge, help you find homes that fit your budget, and guide you through making an offer. Most agents are only paid if a sale goes through, so there’s no upfront cost.
Choosing the right real estate agent
Select an agent who understands your needs and is familiar with the area you’re targeting. They can provide valuable data, handle negotiations, and coordinate with other professionals. If you choose to buy without an agent, consult a lawyer or notary to review contracts and ensure the legal process is handled correctly.
Making an offer on a home
Your offer should include the price, closing date, and a deposit (typically 1% to 3% of the price). It's smart to include conditions such as a home inspection or financing approval. You can also request extras like appliances. A skilled agent can help you structure a strong offer and negotiate effectively.
Be prepared for additional costs
Buying a home in Canada involves more than just the listed price. Expect to pay an extra 1.5% to 4% of the purchase price in closing costs. These include legal fees, inspections, title insurance, property tax adjustments, and possibly appraisal fees. If you have limited Canadian credit or employment history, you may also need a higher down payment, sometimes up to 35%. This is especially true in high-cost markets like Toronto and Vancouver.
Home inspections
A home inspection is strongly recommended and typically costs $500 to $800. It helps uncover potential issues like roof damage, plumbing defects, or mold. Always hire a certified inspector to avoid surprises later.
Legal and closing fees
Legal fees usually range from $500 to $1,000 and cover title searches, deed registration, and mortgage paperwork. Land transfer taxes vary by province and can add 0.5% to 4% to your total cost. Budgeting for these expenses in advance helps ensure a smooth closing.
Utilizing CMHC and other resources
Buying a home in Canada as a newcomer can feel daunting, but the Canada Mortgage and Housing Corporation (CMHC) offers valuable resources to ease this process. CMHC provides guides and checklists in eight languages, including English, Mandarin, and Arabic, making information more accessible.
For those with limited Canadian credit history, CMHC programs allow the use of reference letters from financial institutions in your home country to show creditworthiness. This can be crucial if you're a first-time home buyer or have a temporary or study permit.
CMHC-insured financing is a useful tool for both permanent and non-permanent residents. It offers mortgage loan insurance, which is required if your down payment is less than 20%. This insurance safeguards lenders against mortgage defaults, making it easier for you to secure financing.
Here’s a quick checklist to get started:
- Gather reference letters and proof of income.
- Check your international credit report.
- Consider mortgage options and rates.
- Calculate potential mortgage payments and additional costs like property taxes.
- Get a mortgage pre-approval.
Using these resources and steps can help you navigate the Canadian real estate market with greater confidence.
Support from banks and financial institutions
Many Canadian banks and mortgage lenders offer programs to support newcomers. Financial institutions like TD, BMO, RBC and CIBC have specialized mortgages for newcomers to Canada. These programs are designed to help those with little or no Canadian credit history get started on their home-buying journey. They often accept international credit reports or other credit verifications in place of a Canadian credit history, making it easier for newcomers to qualify for a mortgage. Additionally, these programs are not limited to permanent residents; temporary residents with valid permits can also benefit.
Rent‑to‑own as an alternative path to buying a home in Canada for newcomers
If you're not mortgage-ready, maybe still building credit or saving funds, rent‑to‑own can offer a more attainable way in. It allows you to live in the home now while preparing for future purchase. Here's how it works:
Step 1: Apply to pre‑qualify
Apply to a rent‑to‑own provider like Requity Homes. You'll be assessed based on income and credit, but it typically won't affect your score. Most applicants need a minimum annual income of $70,000 and at least $5,000 saved for a down payment.
Start the rent-to-own application process - it takes minutes, and there's no commitment to get started!
Step 2: Get full approval
Submit documents like employment letter, income proofs, and ID. Once approved, they provide your home shopping budget, which determines the range of homes you can choose.
Tip: Use this rent-to-own affordability calculator to see how much home you can afford with rent-to-own
Step 3: Find your dream home
Within the approved budget and area, pick your desired house. Keep in mind:
- It must meet provider requirements
- The provider still purchases the property
- The home must be in good condition and suitable as a long‑term purchase.
Browse rent-to-own listings in Canada
Step 4: We buy the home
Once your chosen home is approved:
- The provider covers purchase costs, including closing fees, legal, and land transfer tax;
- You sign a lease with option-to-purchase agreement.
- Typically, an “option fee” is paid upfront, some or all may be non-refundable, but credited toward purchase price.
Read more about rent-to-own agreements
Step 5: Move in and save up
You rent the home, often at or slightly above normal market rent. A portion, typically rent credits, is applied monthly toward eventual purchase. Meanwhile, it’s an opportunity to:
- Build credit
- Save for a down payment
- Test the home and neighbourhood overnight before committing.
Step 6: Buy your home
When you’re mortgage-ready (credit, income, down payment), you exercise the purchase option at a pre-agreed price, often fair market value established at contract signing. You’re now ready to finalize:
- Mortgage approval
- Transfer of ownership
- Move from rent‑to‑own to full owner-occupant.
If you decide not to purchase, you may lose rent credits and the option fee, but can walk away at lease end.
Ready to take the next step toward owning your first home in Canada?
Buying a home as a newcomer is achievable with the right knowledge, planning, and support. If you're mortgage-ready, traditional options offer long-term investment and stability. If you're still building credit or saving, rent-to-own provides a practical path forward.
Requity Homes helps newcomers turn renting into owning
For those not yet able to qualify for a mortgage, Requity Homes offers a unique solution. Their rent-to-own program is designed to make homeownership accessible to newcomers through a clear, supportive process:
- Quick pre-qualification with no credit impact
- Home purchased on your behalf in your chosen community
- Closing costs covered, including legal and land transfer fees
- Flexible renting period while you build savings and credit
- Guaranteed purchase option once you're mortgage-ready
With Requity, you don’t need perfect credit or a full down payment to get started. It’s a step-by-step way to transition from renting to owning—on a timeline that works for you.