Canada remains an attractive real estate market for foreign investors and non-residents — but buying property as a non-resident involves higher costs, stricter lending requirements, and a complex regulatory landscape. Here is everything non-residents need to know about getting a Canadian mortgage.
Non-resident status for mortgage purposes
Canadian lenders classify buyers into categories that affect mortgage terms:
| Status | Definition | Mortgage Treatment |
|---|---|---|
| Canadian citizen (resident) | Living in Canada | Standard mortgage terms |
| Permanent resident | PR card holder, living in Canada | Standard mortgage terms |
| Canadian citizen (non-resident) | Canadian citizen living abroad | Near-standard terms; some restrictions |
| Temporary resident | Work permit, study permit | Varies — some qualify for standard terms |
| Foreign national (non-resident) | No Canadian status, living abroad | Strictest terms — this guide |
Important distinction
Canadian citizens living abroad are treated far more favourably than foreign nationals. If you are a Canadian citizen working overseas, you can often get close-to-standard mortgage terms with a 20% down payment. This guide focuses primarily on foreign nationals with no Canadian immigration status.
Mortgage requirements for non-residents
Down payment
| Lender Type | Minimum Down Payment | Notes |
|---|---|---|
| Big 5 banks | 35% | Some branches may require more |
| Credit unions | 35–50% | Varies significantly |
| B lenders | 35–50% | Higher rates |
| Private lenders | 25–50% | Highest rates; most flexible |
CMHC mortgage default insurance is not available for non-resident purchases. All non-resident mortgages are conventional (uninsured).
Source of down payment
Lenders scrutinize the source of funds more carefully for non-resident buyers:
| Source | Accepted? | Documentation Required |
|---|---|---|
| Personal savings (home country) | Yes | 3–6 months of bank statements showing accumulation |
| Gift from family | Usually yes | Gift letter + donor bank statements |
| Sale of property abroad | Yes | Sale agreement, closing documents, wire transfer records |
| Investment liquidation | Yes | Brokerage statements, liquidation records |
| Borrowed funds | Generally no | Most lenders do not accept borrowed down payments |
| Cryptocurrency | Rarely | Must be converted to fiat with full documentation |
Anti-money laundering (AML) requirements: All funds entering Canada for property purchases must be documented and traceable. FINTRAC regulations require reporting of international transfers of $10,000+. Your lawyer and lender will both require a complete paper trail.
Interest rates
Non-resident mortgages typically carry a rate premium:
| Scenario | Rate Premium |
|---|---|
| Canadian citizen abroad | +0.00–0.25% |
| Permanent resident (new to Canada) | +0.00% (standard rates) |
| Foreign national, strong application | +0.25–0.50% |
| Foreign national, weaker application | +0.50–1.00% |
| B lender / private | +1.00–3.00% |
Amortization
| Lender | Maximum Amortization |
|---|---|
| Big 5 banks | 25 years |
| Credit unions | 20–25 years |
| B lenders | 20–25 years |
Documentation required
| Document | Purpose |
|---|---|
| Valid passport | Identity verification |
| Proof of income (home country) | Employment letter, tax returns, pay stubs — may need to be translated and notarized |
| International credit report | From your home country (Equifax, Experian, or local equivalent) |
| Canadian bank account | Required for mortgage payments |
| Proof of down payment source | 3–6 months bank statements |
| Property purchase agreement | Signed offer |
| Canadian lawyer information | For closing |
| Reference letters | Some lenders require professional/banking references |
The foreign buyer ban (2023–2027)
Prohibition on the Purchase of Residential Property by Non-Canadians Act
| Detail | Current Status |
|---|---|
| Effective dates | January 1, 2023 – December 31, 2027 |
| Who is restricted | Non-Canadians (no PR or citizenship) and certain foreign-controlled corporations |
| What is restricted | Purchase of residential property in Census Metropolitan Areas (CMAs) or Census Agglomerations (CAs) |
| Penalty for violation | Up to $10,000 fine; court may order sale of the property |
Exemptions from the ban
| Exemption | Details |
|---|---|
| Permanent residents | Not affected by the ban |
| Temporary residents (work permit) | Exempt if they have filed tax returns for 3 of the preceding 4 tax years and the property is ≤ $500,000 |
| Temporary residents (study permit) | Exempt if enrolled in an authorized institution, filed tax returns, and property is ≤ $500,000 |
| Refugees and protected persons | Exempt |
| Spouse of Canadian citizen or PR | Exempt (can purchase jointly) |
| Rural areas | Properties in areas with population < 10,000 are exempt |
| Recreational property | Cottages and vacation properties (not in CMAs) may be exempt |
| Diplomatic and consular | Exempt |
Practical impact
The ban has significantly reduced but not eliminated foreign purchases. Non-residents who do not fall under an exemption must either wait until the ban expires, purchase in eligible rural areas, or structure the purchase through an exempt person (which must be legitimate — sham arrangements carry penalties).
Lender options for non-residents
Big 5 banks
| Bank | Non-Resident Mortgages | Notes |
|---|---|---|
| RBC | Yes | International banking division; dedicated non-resident program |
| TD | Yes | Through international banking; may require in-branch visit |
| BMO | Yes | Active in non-resident lending, especially for Chinese and Hong Kong buyers |
| Scotiabank | Yes | Strong international network (Caribbean, Latin America, Asia) |
| CIBC | Yes | Through CIBC International Banking |
Other options
| Lender Type | Pros | Cons |
|---|---|---|
| HSBC Canada | Strong for clients with existing HSBC relationship globally | Limited branch network in Canada |
| Credit unions | May be more flexible on property type | Less experience with non-residents |
| B lenders | Accept applications Big 5 decline | Higher rates (+0.50–1.50%) |
| Private lenders | Most flexible — last resort | Highest rates (+3–5%); short terms (1–2 years) |
Working with a mortgage broker
A mortgage broker experienced in non-resident financing is strongly recommended. They can:
- Access lenders that specialize in non-resident mortgages
- Navigate documentation requirements across countries
- Find the best rate for your specific situation
- Handle translation and notarization requirements
Tax implications for non-resident property owners
Taxes at purchase
| Tax | Rate | Applies Where |
|---|---|---|
| Land transfer tax | Varies by province | All provinces (except Alberta and Saskatchewan which use registration fees) |
| BC Foreign Buyer Tax | 20% | Metro Vancouver, Fraser Valley, Capital Regional District, Nanaimo, Kelowna |
| Ontario Non-Resident Speculation Tax | 25% | Province-wide |
| GST/HST on new construction | 5–15% | New builds only (not resale) |
Annual taxes
| Tax | Rate | Notes |
|---|---|---|
| Property tax | Varies by municipality | Same rate as residents |
| Underused Housing Tax (UHT) | 1% of property value | Annual tax if property is underused or vacant; some exemptions |
| Vancouver Empty Homes Tax | 5% of assessed value | If not occupied for 6+ months per year |
| BC Speculation and Vacancy Tax | 0.5–2% | Varies by owner type and location |
| Toronto Vacant Home Tax | 3% of assessed value | If unoccupied for 6+ months |
Taxes on rental income
Non-residents earning rental income from Canadian property face:
| Withholding Method | Tax Rate | Process |
|---|---|---|
| Gross withholding (default) | 25% of gross rent | Property manager withholds and remits to CRA |
| Section 216 election | Tax on net rental income at graduated rates | File NR6 form, then file Section 216 return — usually results in lower tax |
| NR4 slip | Issued by payer | Reports the income and tax withheld |
Always file the Section 216 election. Without it, you pay 25% on gross rent. With it, you deduct expenses (mortgage interest, property taxes, insurance, maintenance) and pay tax only on net income at graduated rates — which is almost always less.
Taxes on sale
| Tax Event | Rate / Rule |
|---|---|
| Capital gains | 50% inclusion rate (first $250,000 of annual gains; 66.7% thereafter per 2024 changes) |
| Section 116 withholding | 25% of gross sale price withheld by buyer’s lawyer unless clearance certificate obtained |
| Clearance certificate | Apply to CRA before closing; certifies your tax obligations are met |
| Principal residence exemption | Not available if property was never your principal residence |
| Section 216.1 election | File Canadian tax return to report the disposition and claim expenses |
Critical: If you sell without a clearance certificate, the buyer’s lawyer must withhold 25% of the entire sale price (not just the gain) and remit it to CRA. Apply for the certificate well in advance of closing (6–8 weeks minimum).
Step-by-step: getting a non-resident mortgage
1. Determine eligibility under the foreign buyer ban
Are you exempt? If not, wait for the ban to expire or purchase in an eligible rural area.
2. Open a Canadian bank account
Visit a Canadian bank branch or use an international banking division. RBC, TD, and BMO all have processes for non-residents.
3. Gather documentation
Assemble income proof, credit references, and down payment documentation from your home country. Have everything translated to English or French if necessary. Notarize where required.
4. Engage a Canadian mortgage broker
Work with a broker experienced in non-resident mortgages. They will identify lender options and guide you through the process.
5. Get pre-approved
Submit your application and documentation. Pre-approval confirms how much you can borrow and on what terms.
6. Find a property and make an offer
Work with a local real estate agent. Include a financing condition in your offer.
7. Complete the mortgage application
After your offer is accepted, submit the formal application with the property details. The lender will order an appraisal.
8. Hire a Canadian real estate lawyer
Your lawyer will handle the closing, title search, land transfer tax, and any withholding obligations.
9. Transfer funds to Canada
Wire the down payment and closing costs to your Canadian bank account or your lawyer’s trust account. Ensure full documentation for AML compliance.
10. Close the purchase
Sign documents, transfer funds, receive the keys.
Costs summary: non-resident buying a $800,000 property in Ontario
| Cost | Amount |
|---|---|
| Down payment (35%) | $280,000 |
| Ontario land transfer tax | $12,475 |
| Ontario NRST (25%) | $200,000 |
| Legal fees | $2,000–$3,000 |
| Appraisal | $400–$600 |
| Title insurance | $300–$500 |
| Home inspection | $400–$600 |
| Total upfront | ~$496,000 |
The NRST alone adds $200,000 to the cost of an $800,000 property. This is the single biggest cost for non-resident buyers in Ontario and BC.
Summary
| Factor | Non-Resident Mortgage |
|---|---|
| Down payment | 35–50% |
| CMHC insurance | Not available |
| Interest rate | Standard to +1.00% |
| Amortization | Up to 25 years |
| Lender options | Big 5 banks, select credit unions, B lenders |
| Foreign buyer ban | In effect until 2027; exemptions available |
| Provincial foreign buyer tax | 20% (BC) or 25% (Ontario) |
| Annual UHT | 1% if underused |
| Rental income tax | 25% gross withholding (reducible via Section 216) |
| Key requirement | Canadian bank account, documented down payment source, translated income verification |
Non-resident property purchases in Canada remain possible but expensive. Between the foreign buyer ban, provincial speculation taxes, the Underused Housing Tax, and higher down payment requirements, the total cost of entry is significantly higher than for Canadian residents. Work with a mortgage broker and tax advisor who specialize in cross-border real estate.