Canada – Property Financing

Can foreign nationals get a mortgage from a local bank or lender in Canada?

Property financing in Canada is accessible to foreign buyers, but they must satisfy specific non-resident lending criteria to qualify. Before approaching any lender, however, understanding the current legal framework governing foreign ownership is essential. The most consequential piece of legislation in this area is the Prohibition on the Purchase of Residential Property by Non-Canadians Act — commonly known as the foreign buyer ban — which has been extended to remain in force until January 1, 2027.

Enacted in 2022 and effective from January 1, 2023, the Act was designed to dampen speculative foreign investment in Canadian residential real estate by barring non-Canadians from acquiring residential properties. Under the Act, “non-Canadians” encompasses individuals who hold neither Canadian citizenship nor permanent resident status, along with foreign corporations and entities under non-Canadian control. Anyone who does not hold citizenship or permanent residency must therefore confirm whether they fall within an exemption before pursuing any mortgage application.

The Act and its associated Regulations carve out a limited number of exemptions for individuals and entities that would otherwise be subject to the prohibition. These include certain temporary residents, protected persons, non-Canadian individuals acquiring property jointly with an eligible Canadian spouse or common-law partner, and other categories prescribed by the Regulations. Temporary residents — such as those holding valid study or work permits — may still purchase homes under defined conditions, typically requiring evidence of intent to settle permanently in Canada, demonstrated through factors such as a history of filing Canadian tax returns and consistent physical presence in the country.

Not every lender provides a mortgage product tailored to non-residents, making the choice of institution highly significant. Canada’s major chartered banks — including RBC, TD, CIBC, BMO, and Scotiabank — do maintain programmes for non-resident and newcomer borrowers, though the eligibility conditions differ from one institution to the next. CIBC, for instance, offers a Foreign Worker Mortgage for individuals holding a valid work permit, as well as newcomer mortgage programmes for those who have obtained permanent resident status within the last five years or foreign workers whose Canadian work permit was issued for a term of at least twelve months.

For those who are genuinely foreign nationals rather than newcomers in transition, specialist lenders or internationally experienced mortgage brokers are frequently the most practical avenue. International banks with a Canadian presence can sometimes ease verification of foreign income and credit histories. Engaging a knowledgeable mortgage broker can substantially expand the range of lending options available and provide guidance tailored to the nuances of a cross-border application.

What deposit or down payment is typically required for a foreign buyer in Canada?

Non-residents are generally required to provide a considerably larger down payment than Canadian citizens or permanent residents. Most lenders set a minimum of 35% of the purchase price, and these funds must come from the applicant’s own resources rather than borrowed money. This stands in sharp contrast to the 5% minimum deposit available to first-time buyers with Canadian residency, and is substantially above the 20% threshold common in many Western mortgage markets.

Elevated down payment requirements are standard, with buyers from the United States often facing a 20% requirement and those from other countries typically needing to provide 35%. Gifted funds are generally not accepted, and lenders will require clear evidence that the money belongs to the applicant. The exact percentage demanded will reflect the lender’s risk assessment, the applicant’s country of origin, and the overall strength of their financial profile.

Some lenders may require even more than 35% depending on the property type or its location. Beyond the percentage itself, the funds must typically be held in a Canadian bank account for at least 30 days prior to closing in order to satisfy seasoning requirements.

Permanent residents, by contrast, may qualify for down payments as low as 5–20% depending on property value and their financial circumstances — a striking illustration of how profoundly residency status influences the loan-to-value ratio available to a buyer. As of December 15, 2024, new rules also apply: first-time buyers and those purchasing newly built homes with a down payment below 20% may qualify for a 30-year amortisation period, while insured mortgages in all other cases remain capped at a 25-year amortisation. Current minimum requirements should always be confirmed directly with individual lenders or with the Office of the Superintendent of Financial Institutions (OSFI), Canada’s principal federal financial regulator.

What interest rates and loan terms are available to foreign borrowers in Canada?

Lenders apply a rate premium to non-resident borrowers to reflect the heightened risks associated with verifying foreign income and credit histories, and some institutions decline to offer this type of lending altogether. The rate offered will vary based on the lender, the property’s location, the overall strength of the mortgage application, and the size of the down payment.

As of 2025, non-residents typically pay between 0.25% and 0.50% more than the rates available to Canadian residents. Given the variation between lenders, it pays to compare offers thoroughly. Rates move in line with the Bank of Canada’s policy rate, so checking current offerings directly with lenders is always advisable.

Canada’s mortgage market operates on a term-and-amortisation framework that may differ significantly from what international buyers are accustomed to. The mortgage term defines how long a borrower is committed to a particular rate and set of conditions with their lender. Terms run from six months to ten years, with five years being by far the most common. At the end of a term, borrowers renegotiate a new term on the outstanding principal at whatever rates prevail at that time. This structure contrasts markedly with markets such as the United States or Germany, where borrowers can lock in a fixed rate for the entire 25- to 30-year amortisation period.

Amortisation periods in Canada are generally 25 to 30 years depending on borrower profile and product type. Within these frameworks, several rate structures are available. Fixed-rate mortgages maintain the same interest rate for the duration of the term, delivering predictable monthly payments. Variable-rate mortgages move with market conditions, potentially offering lower initial payments but exposing the borrower to rate increases. Open mortgages permit early repayment without penalty, while closed mortgages generally carry lower rates but impose limits on prepayment.

What documents and eligibility criteria do foreign nationals need to apply for a mortgage in Canada?

Lenders will demand comprehensive documentation, a clear audit trail for all financial flows, and demonstrated ability to meet Canadian compliance standards. Because foreign applicants typically cannot be assessed through Canada’s domestic credit bureaus, every aspect of their application is subject to heightened scrutiny.

The following documents are typically required:

• Valid passport and visa or immigration documentation confirming your status in Canada
• Proof of income — recent pay stubs, employment contracts, and foreign tax assessments
• For self-employed applicants, at least two years of financial statements
• Foreign credit report or a reference letter from your home-country bank
• Bank statements showing the origin and “seasoning” of your down payment funds
• Property appraisal and, in Quebec, a notary-certified purchase offer

Foreign applicants face more rigorous Know Your Customer (KYC) and anti-money-laundering checks than domestic borrowers, including source-of-funds verification and country compliance assessments. Absent or outdated Canadian credit history, along with employment contracts in non-standard foreign formats, can extend processing times and generate additional requirements — and may even result in automatic declines under standard lender scoring models, regardless of how strong the applicant’s finances actually are.

Lenders may require foreign income to be denominated in a major currency, and some will apply a discount to that income to account for exchange rate volatility. Practical preparation includes assembling three to six months of bank statements and payslips well ahead of the application, ensuring that down payment funds are clearly traceable to your own resources, and maintaining an active Canadian bank account wherever possible to facilitate smooth movement of funds.

Are there any restrictions on the types of property foreign nationals can finance in Canada?

The Prohibition Act defines residential property as buildings containing three dwelling units or fewer. The ban — and the lending restrictions that flow from it — therefore applies primarily to detached houses, semi-detached homes, rowhouses, and condominium units.

The Act targets residential dwellings in these categories and does not extend to commercial or industrial properties. Buildings with four or more dwelling units are not caught by the prohibition, nor are acquisitions of vacant land zoned for residential or mixed use. This means larger apartment complexes and commercial assets remain available to foreign buyers, though the financing structures for these differ substantially from residential mortgage products.

The Regulations confine the Act’s application to residential properties situated within a Census Agglomeration (CA) or Census Metropolitan Area (CMA). CAs are defined as having a core population of at least 10,000, while CMAs require a total population of at least 100,000, with at least 50,000 living in the core. Properties lying outside these defined geographic boundaries — typically rural and recreational areas — are not subject to the prohibition.

In practice, the law is primarily directed at curbing foreign investment in residential property; foreign nationals may still acquire vacation homes, mobile homes, and recreational properties such as cottages or cabins provided these fall outside designated Census areas. Recreational and vacation properties frequently lie outside Census boundaries and may be exempt. The CMHC interactive map tool should be used to confirm whether a specific property sits within a restricted area before proceeding.

Are there government schemes, developer financing, or alternative routes to financing property in Canada?

The majority of government-backed mortgage programmes in Canada — including those administered through the Canada Mortgage and Housing Corporation (CMHC) — are designed principally for Canadian residents and citizens. Mortgage default insurance, which is required when a down payment is below 20%, is rarely available to non-residents and, in the exceptional cases where it might apply, adds further to overall costs. Most foreign nationals will find that insured mortgage products are simply out of reach.

Canadian first-time home buyers can access incentive programmes such as the First Home Savings Account and the Home Buyers’ Plan (HBP), which offer tax-advantaged ways to accumulate a down payment. However, eligibility for an FHSA requires Canadian residency, a Social Insurance Number (SIN) or temporary SIN, and having reached the age of majority in your province or territory. These programmes are therefore largely confined to those who have already established residency in Canada.

Developer financing and pre-construction payment schedules represent an alternative path that some foreign investors pursue, particularly in major urban condominium markets. Pre-construction projects can sometimes accommodate foreign investment if structured appropriately, though buyers must ensure the developer is compliant and that adequate escrow protections are in place. In competitive city markets such as Toronto and Vancouver, bridge financing is also used: buyers who need to move quickly to secure a unit before long-term mortgage arrangements are finalised sometimes rely on a bridge loan to cover the gap — a strategy commonly employed by international investors.

Can foreign nationals use overseas financing — such as releasing equity from a property abroad — to fund a purchase in Canada?

Arranging financing in your home country and using the proceeds to fund a Canadian property purchase is a recognised and widely used approach. There is no restriction on bringing funds into Canada for this purpose, provided the origins of those funds are properly documented and declared in order to satisfy Canada’s anti-money laundering requirements.

Releasing equity from overseas property — whether through a remortgage, a home equity line of credit, or another facility available in your home jurisdiction — is a practical option. The released funds are simply transferred to Canada as part of the purchase. Given that these amounts tend to be substantial, exchange rate movements can have a meaningful impact on the total cost. Engaging a financial adviser or a specialist foreign exchange service can help limit unnecessary losses on large international transfers.

Non-resident investors should be aware that rental income earned from Canadian property may attract withholding tax unless an NR6 form is filed and an annual Section 216 return submitted to the Canada Revenue Agency (CRA). Any sale of Canadian real estate by a non-resident also triggers a clearance certificate requirement and a capital gains calculation. Buyers using home-country financing should take advice from a cross-border tax specialist before finalising any structure, to avoid unexpected double-taxation exposure. The Canada Revenue Agency (CRA) publishes detailed guidance on the taxation of non-residents who hold Canadian property.

Are new property owners liable for any outstanding debts or charges on a property in Canada?

Canada’s provincial land registry systems are built on the principle of indefeasibility of title, which broadly means that a buyer who registers ownership acquires the property free of undisclosed encumbrances. However, this protection is not automatic — it depends entirely on rigorous due diligence being carried out ahead of closing.

Unpaid property taxes, utility arrears, mortgage liens, construction liens (also referred to as builder’s or mechanics’ liens), and other registered charges can remain attached to a property and pass to the new owner if they are not identified and discharged before the transaction completes. A Canadian real estate lawyer is required to handle the conveyancing, and a central part of that role is conducting a thorough title search through the provincial land registry to surface any encumbrances before money changes hands.

Legal fees for a conveyancing transaction typically run from CAD $1,500 to $3,000, depending on complexity, and additional costs may include a title insurance premium and a lender-required appraisal fee. Title insurance is standard practice in Canada and offers protection against title defects, survey discrepancies, and encumbrances that may escape detection during a standard title search. This contrasts with certain civil law jurisdictions in continental Europe where a notary assumes responsibility for title verification; in Canada’s common-law provinces, protection rests on the combined work of the buyer’s solicitor and a title insurance policy.

Buyers should verify the land registry relevant to the province where their property is located. Key registries include Ontario’s Land Registry, BC’s Land Title and Survey Authority (LTSA), and equivalent bodies across other provinces. Instructing a local real estate lawyer to carry out a full title search and advise on any outstanding charges before executing a final purchase agreement is non-negotiable.

What taxes and additional costs should foreign buyers budget for when financing property in Canada?

The tax burden on foreign property buyers in Canada is substantial, operating simultaneously at federal, provincial, and in some cities, municipal levels. Prospective buyers — and foreign buyers in particular — should carefully assess the financial consequences of the measures introduced by governments at each of these levels before proceeding.

Land Transfer Tax (LTT): A land transfer tax is a provincial levy payable by the buyer on completion of a real estate purchase. Alberta and Saskatchewan do not impose one, but most other provinces do, with rates calculated on the purchase price. In Ontario, British Columbia, and Nova Scotia, the picture becomes more complex and costly when foreign buyer rules are layered on top. In Ontario, the buyer pays the provincial land transfer tax at closing, and purchases within the City of Toronto attract an additional municipal land transfer tax on top of the provincial charge.

Non-Resident Speculation Tax (NRST) — Ontario: Since October 2022, non-Canadian citizens, non-permanent residents, and foreign corporations acquiring residential property anywhere in Ontario have been liable for an additional 25% NRST. Rebates are available in certain circumstances — for example, a buyer who becomes a permanent resident within four years of purchase may be eligible to recover the tax paid. Effective January 1, 2025, the City of Toronto has introduced a further 10% Municipal Non-Resident Speculation Tax (MNRST) on residential property purchases by foreign entities. Taken together, a foreign buyer purchasing in Toronto in 2025 faces a combined foreign buyer surcharge of 35% over and above standard land transfer taxes.

Additional Property Transfer Tax — British Columbia: Foreign buyers purchasing property in BC’s designated regions — which include Metro Vancouver, the Fraser Valley, the Capital Regional District, Kelowna, and Nanaimo — are subject to a 20% Additional Property Transfer Tax (APTT) as of 2025.

Nova Scotia Non-Resident Deed Transfer Tax: Nova Scotia introduced a Non-Resident Deed Transfer Tax of 5% in 2022, subsequently raising it to 10% with effect from April 1, 2025.

Other closing costs for financed purchases include:

• Legal fees, typically CAD $1,500–$3,000 (as of 2025)
• Property appraisal fee (required by most lenders)
• Title insurance premium
• Mortgage arrangement or broker fees (where applicable)
• Home inspection fee
• Ongoing municipal property taxes, utilities, and, where applicable, condominium maintenance fees

For authoritative and current figures, consult the Canada Revenue Agency (CRA) and the revenue ministry of the relevant province. Tax rates and surcharges change frequently — always verify the rates in force at the time of any transaction with a local real estate lawyer or tax professional before executing a purchase agreement.

What should foreign buyers know about currency exchange and transferring funds into Canada?

Canada places no restriction on bringing foreign funds into the country for the purpose of buying property, but all material inbound transfers must be traceable and compliant with Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Lenders, lawyers, and notaries are all legally required to conduct anti-money laundering checks, and it is the buyer’s responsibility to ensure that any deposits and large transfers can be clearly traced to their legitimate source.

Because purchase funds will typically originate outside Canada, exchange rate fluctuations can have a meaningful effect on total outlay. Working with a financial adviser or engaging a specialist foreign exchange service can significantly reduce unnecessary losses when converting large sums. This is particularly relevant for buyers funding a Canadian dollar down payment from a foreign currency account, where the rate prevailing on the day of transfer directly determines the effective cost of the payment.

For buyers who take out a Canadian dollar mortgage while earning income in another currency, ongoing exchange rate exposure is a material concern. If the home currency depreciates against the Canadian dollar, each mortgage repayment becomes effectively more expensive when measured in local currency terms. Hedging instruments such as forward contracts, available through specialist currency brokers, can help manage this risk across the mortgage term.

Lenders will convert foreign income to Canadian dollars when assessing affordability, and some apply a discount or haircut to that income to reflect this very risk. On disposal, any sale of Canadian property by a non-resident triggers a clearance certificate requirement with the CRA and a capital gains calculation, meaning that repatriating sale proceeds requires proper tax clearance before funds can be transferred out. Engaging a cross-border tax specialist and a regulated foreign exchange provider to manage both inbound and outbound transfers ensures the process is handled efficiently and in full compliance with Canadian law.

Frequently Asked Questions

What happens to my Canadian mortgage if my visa or work permit is not renewed?

Your mortgage contract is a legally binding obligation that exists independently of your immigration status. If your visa or work permit expires, the outstanding mortgage debt remains fully enforceable and you continue to be liable for all repayments. Missed payments could lead to the lender pursuing repossession proceedings. It is important to notify your lender promptly if your immigration status changes significantly. Some lenders may call in the loan or require you to refinance if you no longer meet their residency conditions — always review the specific terms of your mortgage agreement carefully and seek legal advice if your situation alters.

Will a foreign credit score or credit history be recognised by Canadian lenders?

Canadian lenders are not always able to retrieve international credit reports, which means your home-country credit record may not translate directly into the Canadian assessment process. Many lenders will, however, accept a reference letter from your home bank, a report from an internationally recognised credit bureau, or a comprehensive statement of assets and liabilities as an alternative. Establishing a Canadian credit history before applying — for example through a secured credit card or by actively maintaining a Canadian bank account — is strongly advisable.

Can I apply for a Canadian mortgage while still living abroad?

It is possible to begin the mortgage application process from outside Canada, though lenders will expect meticulous documentation and a transparent financial trail throughout. In practice, you will generally need to be physically present in Canada — or have a legal representative acting under a power of attorney — for the property inspection, any required notarisation, and the closing itself. Engaging an international mortgage broker or a broker with specific experience in non-resident lending will make the process considerably more manageable.

Is purchasing property through a company a way around the foreign buyer ban?

No. The Act explicitly prevents non-Canadians from sidestepping the prohibition by acquiring residential property through corporations or other entities. The concept of “control” is defined broadly under the legislation, capturing direct or indirect ownership of shares or interests representing 10% or more of equity or voting rights, as well as de facto control in any form. Attempting to use a corporate structure to circumvent the ban is not a viable strategy and exposes the parties involved to significant legal and financial penalties.

What if I am a foreign national buying jointly with a Canadian citizen or permanent resident?

The Prohibition Act provides a specific exemption allowing a non-Canadian to purchase residential property jointly with a spouse or common-law partner who is a Canadian citizen, a person registered as an Indian under the Indian Act, a permanent resident, or a qualifying temporary resident. That said, lenders will still evaluate the foreign co-borrower’s income and creditworthiness, and the documentation and down payment requirements applicable to the non-Canadian applicant will still need to be met. Non-resident speculation taxes may also continue to apply in certain provinces depending on how ownership is structured.

How do I handle a Canadian mortgage if I relocate abroad again after purchasing?

Leaving Canada after purchasing property may result in your reclassification as a non-resident for tax purposes, which brings a range of additional obligations. Rental income earned from the property may attract withholding tax unless you file an NR6 form and submit an annual Section 216 return to the CRA. Your mortgage will generally remain in place and payments can be transferred from abroad, though some lenders may require notification if your residency status changes. Engaging a cross-border accountant and formally notifying the CRA of your non-resident status are both essential steps.

Are recreational or vacation properties in Canada subject to the foreign buyer ban?

Foreign nationals may still acquire vacation homes, mobile homes, and recreational properties such as cottages or cabins that lie outside Census Metropolitan Areas and Census Agglomerations. Communities with a population below 10,000 that fall outside these Census designations generally still permit foreign ownership of recreational property. The precise location of any property must always be verified against the CMHC’s official map tool before proceeding, as some smaller recreational municipalities within designated areas remain subject to the prohibition.

Where can I find official, up-to-date guidance on Canadian mortgage and property rules for foreign nationals?

The most authoritative official sources are: the Canada Mortgage and Housing Corporation (CMHC) for guidance on the foreign buyer ban and housing programmes; the Office of the Superintendent of Financial Institutions (OSFI) for mortgage underwriting standards; the Canada Revenue Agency (CRA) for non-resident tax obligations, withholding rules, and capital gains treatment on property disposals; and the provincial land registry relevant to your purchase, such as the BC Land Title and Survey Authority or Ontario Land Registry, for title searches and property records. Always engage a qualified Canadian real estate lawyer and a licensed mortgage broker for advice tailored to your individual circumstances.