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New to Canada Mortgage

If you migrated to Canada less than 5 years ago or want to find out what is new to Canada mortgage Toronto in 2021, you have come to the right place. We started our company not just to offer the best assistance on how to get a mortgage in Canada but also to educate our clients on what is new to Canada mortgage. With newcomer mortgages playing a vital role in the future of Canada, we work with new residents to help them find the best terms on new immigrant mortgages. As well, we debunk the myths surrounding mortgages for newcomers.

#1 Common Misconception About Newcomer Mortgages in Canada

There are many misconceptions about newcomer mortgage in Canada. The most common is newcomers (persons who migrated to Canada less than 5 years ago) cannot get a mortgage from large Canadian banks.

That is not true. We understand that you and your family have unique needs. We work closely with newcomers to offer special mortgage programs unique for them. If you need a new to Canada mortgage, simply call us.

#2 Common Misconception About Newcomer Mortgages in Canada

The second most common myth is that newcomers never qualify for a mortgage if they lack a well-established credit history in Canada. The truth is that you meet other eligibility requirements; you will qualify for a newcomer mortgage.

Moreover, if you need a new to Canada mortgage, it is also good to note that it is a myth that you will not qualify for a one if you don’t have a minimum of two years of employment in Canada. There are special programs available to help newcomers that don’t meet the two-year employment tenure. We are happy to help.

Basics of Newcomer Mortgage in Canada to Help You to Get Started

Can new immigrants buy a house in Canada? If you are new to Canada mortgage and are asking this question, the answer is yes. Most Canadians never pay for their home at once. They get the money from two main sources - mortgage and mortgage down payment. If you are a newcomer, there are some basics you need to understand about the new to Canada mortgage Toronto in 2021.

What is a Mortgage in Canada?

What is a mortgage in simple terms? This is a common question among people who are new to Canada mortgage. This is money you borrow from lenders to cover the cost of buying a home. You will be required to make regular mortgage payments to the lender within a set period. You make payments with the goal of becoming the outright owner of the home.

A mortgage payment includes a principal and interest. The difference between the purchase price of your desired home and the down payment you make is what is known as the principal. Interest is what lenders charge for borrowing money from them.

What is a Down Payment and How Does it Work?

When you want to buy your first home in Canada, you will come across this term. But how does down payment work? This is a portion of the buying price you pay upfront at the time of buying a home. Putting down more money as a down payment means you will borrow less money and subsequently pay less interest to lenders.

Your immigration status and employment history influence the amount you will have to put down as a down payment.

Benefits of CMB Newcomer Mortgage in Canada

CMB offers special solutions for newcomer mortgage Canada. We consider your situation and provide you with an option that helps you achieve your homeownership goal faster. Additionally, when applying for a new to Canada mortgage, we understand your career might be in transition. To ease the burden, we offer several down payment options based on your employment history in Canada.

Down Payment with 2 years Employment History

Have you been working for at least two years in Canada and can put down a down payment of 20%? If yes, you will be able to qualify for ‘conventional’ mortgages. If you are not able to raise at least 20% of the down payment, you will still have some options in newcomer mortgage Canada. The only difference is your mortgage will have to be insured if you default.

The beauty of applying for a new to Canada mortgage in Toronto in 2021 is that you don’t need to have two years’ employment history for you to qualify. If you can put down a down payment of 35% or higher, you will qualify for the mortgage even without confirmation of employment. However, for you to be eligible, there are certain requirements you will have to meet:

  • Have immigrated to Canada within 5 years.
  • Have a permanent residence status.
  • Have at least 3 months of full employment in Canada.
  • Obtain a letter of reference from a bank in your home country.

Which Type of Mortgage You Qualify For


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Features of New to Canada Mortgage Program

  • As a newcomer with permanent resident status, you will have access to all Sagen, CMHC, and Canada Guaranty mortgage insurance products. However, there are specific eligibility requirements you have to meet.
  • Suppose you are a permanent resident with a limited Canadian credit history and there are no foreign credit bureaus. In that case, alternative payment history sources will be looked at for the Loan-to-Value (LTV) ratios of up to 95%.
  • Newcomers with no permanent resident status can access insured financing of 90% for buying a single unit, owner-occupied residential property.
  • Residency status doesn’t attract additional fees or premiums. Only the standard product-specific premiums will apply.
  • You don’t need to have a minimum residency period to apply for a new to Canada mortgage.
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How to Submit Your Application for New Mortgage in Canada

Build Your Credit Rating

To qualify for a new mortgage in Canada, the first thing you have to do is to build a credit rating. Strong credit ratings will enable you to get amazing mortgage rates. This will help you save thousands of dollars that would otherwise be spent paying high interest. For you to get a better credit rating, you should consider doing the following:


  • Apply for a credit card, use it and pay off debts on time.
  • Pay all your bills on time and in full. This includes your utilities, telecommunication services and rent.
  • Apply for small bank loans and pay them on time.
  • Prove you have a dependable source of income. You can do this by staying with one employer for a long period.

If you lack a strong Canadian credit rating, you can use credit ratings from commonwealth countries. These countries include Australia, the United Kingdom and the United States.

Prepare Credit Supporting Documents

If you lack a strong Canadian credit history, you will have to provide specific supporting documents that prove you have built credit in other ways. The key documents you will be required to provide include the following:

  • Landed immigrant status or valid work permit.
  • Proof of having an income. This can be through pay stubs or employment contracts.
  • Proof of at least 12 months of making rental payments. You may need to provide a letter of confirmation from your landlord.
  • Regular payments on your bills including telecommunications, utilities, and insurance. You may be required to provide a confirmation letter fromyour service providers.
  • Months of bank statements.
  • International credit report.
  • Reference letter from recognized financial institutions.
  • Documented regular savings for not less than 12 months.

To streamline the application process for a new mortgage in Canada, you should gather all of these documents in advance.

Make Sure to Save for Down Payment

While building your credit, it is wise to start saving up money to put down as a down payment. This is because if you have a new permanent resident status in Canada, you will be required to put a down payment of not less than 5% of the total buying price of your target home. For non-permanent residents, the required down payment is 10% of the buying price.

It is also good to note that certain rules apply irrespective of your residency status. For starters, if you are buying a home priced at $500,000 or more, you will be required to pay a minimum down payment of 5% and 10% for any amount over $500,000.

Calculate Your Mortgage Default Insurance Premium

Putting down a down payment below 20% of a home's buying price means you are taking out a high-ratio mortgage. A high-ratio mortgage requires mortgage default insurance. The insurance protects the lender against default. You will not need default insurance if your down payment is 20% or more.

Case Study

If you are buying a home priced at $350,000 and you pay a 10% down payment ($35,000), here is how you calculate the premium.

Step 1: Mortgage Amount

$350,000 - $35,000 = $315,000

Home price Down payment Mortgage amount

Step 2: Insurance Premium

$315,000 X 2.40% = $7,560

Mortgage amount Insurance premium % Insurance premium

Step 3: New Mortgage Amount

$315,000 + $7,560 = $322,560

Original mortgage Insurance premium New mortgage amount

There are three providers in Canada offering mortgage default insurance through the New to Canada Programs. They are Genworth Financial, Canada Guaranty and CMHC. CMHC is more popular, but all three providers charge the same premium rates.

Find a Mortgage Provider

When you need a new to Canada mortgage, you will have to choose a mortgage provider. You can work with a lender (credit union or bank) directly or use a mortgage broker. Mortgage brokers are a safe bet because they will shop around to help you find the best products in the market and the best mortgage rates. Brokers don’t give mortgage loans. They simply negotiate with lenders on your behalf. Make sure you select a mortgage broker that is approved by the newcomer program you plan on using. For example, if you prefer CMHC, the broker should be approved by CMHC.

Choose Your Mortgage Amortization Period and Mortgage Term

The amortization period is the time it will take for you to pay the entire mortgage off. Starting 9th July 2012, the maximum amortization period in Canada for a mortgage that requires mortgage default insurance is 25 years. The good news is you can get a much longer amortization period of up to 30 years if you put a down payment of 20% or more. The beauty of a longer amortization period is you will make lower, more manageable monthly payments on your mortgage. This is because the loan is spread out over a long time frame. The drawback is getting a longer amortization period leads to you paying more in interest.

You have to be careful when choosing a mortgage term. This is the time you plan on committing to a single mortgage rate and a single set of conditions from the lender. Mortgage terms can be between 6 months and 10 years. The most common mortgage term is 5 years. Once the term is over, you can negotiate new terms and conditions. There can be multiple mortgage terms throughout the amortization period. Select your mortgage term carefully because expensive prepayment penalties apply if you break the term early.

Fixed Rate VS. a Variable Rate

When applying for a newcomer mortgage in Canada, the last decision you have to make is to decide on the type of mortgage rate you want. You have two options: fixed and variable rates.

With a fixed mortgage rate, the mortgage rate and payments remain the same throughout the mortgage term. With a variable mortgage rate, your mortgage rate (your payments) will be attached to a prime rate and might fluctuate throughout the mortgage term. Whether you need a fixed rate or a variable rate is all up to you. However, your choice should be based on your tolerance for risk and if you think the interest rates will either go down or up in the near future.

If You Are New to Canada Mortgage in Toronto – Let Us Help You

Newcomer mortgage Canada programs come with many incredible benefits. The most attractive one is the ability for newcomers with permanent residence status to buy a home with a down payment of just 5%. Applicants also enjoy competitive interest rates thanks to access to insured financing from providers like CMHC. In addition, new to Canada mortgages are available across the country with no set maximum loan limit.
If you want to learn how to get a mortgage in Canada, CMB is here to help. Our team will advise on saving for the down payment, help you complete a mortgage pre-approval and explain how the mortgage and home-buying process works in Canada. We are also happy to explain the available financing options and refer you to the best realtors. We are always pleased to help you make the right decisions. Contact us today to arrange a meeting in our office or at your home.

Google Reviews

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Afton Jaskolski
2020-12-30

Getting a private mortgage was not easy to be honest, but at least with Mr. Leon it was doable. Thank you for your help!

Davin Mills
2020-12-26

There are a lot of mortgage brokers in toronto to choose from, I was a bit intimidated by that. Don't regret I picked CMB, they took the lead and made sure to cover all the bases

Tracy Wilhoite
2020-11-21

I was renting an apartment for a long time and finally decided to take a big step - get a mortgage instead. Team at certified Mortgage Brokers laid out various options for me. The actual process went smooth and quick, happy with my new home.

Ryder Turcotte
2020-11-16

My wife and I decided to refinance our mortgage and started looking for a mortgage broker in Toronto. There were so many options, so you can imagine how overwhelmed we got! After talking to Leon we decided to proceed with Certified, didn't regret that decision once. They always gave useful recommendations, were attentive, and constantly in touch. And most importantly (for us) they helped us to save some money!!

Lucy Zimmerman
2020-11-11

Vita was great. Helped my son with all the paperwork and got him very good interest rate. On the closing date called to follow up if everything went fine. Quite a pleasant experience. I would recommend this firm for anyone who is looking a mortgage broker.

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