Who is considered a Newcomer to Canada?
A newcomer is someone who has immigrated to Canada within the last 5 years and is already a Permanent Resident or who has received confirmation of Permanent Residence from Immigration, Refugees and Citizenship Canada (IRCC).
Common Myths about Mortgages for Newcomers
Myth: Newcomers to Canada will not be able to obtain a mortgage from a large Canadian bank.
Fact: RBC understands that you and your family have unique needs and offers special mortgage programs designed for Newcomers.
Myth: Newcomers cannot qualify for a mortgage if they do not have a well-established credit history in Canada.
Myth: Newcomers can’t qualify for a mortgage if they do not have at least two years of Canadian employment.
Fact: RBC offers special programs for Newcomers who are new to Canada and do not meet the traditional two-year employment tenure.
The Basics of a Mortgage in Canada
Looking to buy a home in Canada? We’ve got some basics to help you get started.
Most Canadians don’t pay for the full cost of their home at once. Generally, the money required to buy a home comes from two main sources:
a mortgage, and a mortgage down payment.
What is a mortgage?
A mortgage is the money you will borrow from a lender – such as a bank – to help cover the cost of the home you are buying. You make regular mortgage payments to the lender over time with the goal of owning the home outright at the end of the mortgage period.
Your mortgage payment is made up of principal and interest. The principal is the difference between the home’s purchase price and your down payment, and the interest is the lender’s charge for you to borrow the money from them.
What is a down payment?
Your down payment is a portion of the home’s purchase price that you pay upfront at the time of purchase. The more money you put down, the less you need to borrow, and the lower your overall interest costs will be.
Your employment history and immigration status could determine how much down payment you will need in order to buy your first home in Canada.
The Benefits of an RBC Mortgage
RBC has tailored solutions for Newcomers that take into consideration your unique situation, and help you reach your home ownership goals sooner. Also, because we understand that your career may be in transition, we have different down payment options based on your employment history in this country.
Down payment with two years’ employment history
If you have been working for two years and can afford to put down at least 20% of the purchase price, you may qualify for a “conventional” mortgage. If you don't have a 20% down payment, you may still qualify, but your mortgage will need to be insured against default.
Down payment without two years’ employment history
If you have a down payment of at least 35% of the purchase price, you may still qualify for a mortgage without the confirmation of employment that is typically required. Here are some guidelines for this situation:
- You must have immigrated to Canada within 5 years
- You must have permanent residence status
- You must have a minimum of three months’ full employment in Canada
- You may be required to obtain a letter of reference from your bank in your home country
Tools and Resources
Saving for a mortgage down payment isn’t always easy, and everyone’s mortgage needs are different. Fortunately, there is a wide range of mortgage options and savings tools that can help you buy your first home in Canada sooner.
How to Apply for an RBC Mortgage
Talk to an RBC mortgage specialist today to discover how we can help make your home ownership dreams a reality.
Personal lending products and residential mortgages are offered by Royal Bank of Canada and are subject to its standard lending criteria.