Mortgages for newcomers to Quebec: how to succeed in your first home purchase!

Mortgages for Newcomers to Quebec: How to Succeed in Your First Home Purchase

Arriving in a new country is already a huge change. Adding a home purchase can seem intimidating—especially when you don’t know the rules of mortgages in Quebec. The good news: even as new arrivals or immigrants, it is entirely possible to buy, provided you understand how financing works.

In this article, we review what you need to know to obtain a mortgage in Quebec as a newcomer.

1. Status in Canada: an essential starting point

Banks and mortgage insurers (such as CMHC) first look at your immigration status:

a) Permanent resident (PR)

You are generally treated like any other buyer:

• Minimum down payment possible from 5 % of the price (if you meet the other criteria).
• Access to programs for first home purchase
• Mortgage insurance possible up to $1.5 million with less than 20% down.

b) Temporary worker / work permit

Rules vary by lender:

• Many banks require a valid work permit for at least 12 months, ideally 24.
• Some will require a larger down payment (e.g., 10–20 %).
• Stronger file if you work in a permanent, full-time job.

c) Foreign student or visitor

• Very difficult to obtain a traditional residential mortgage.
• You will almost always be asked for a large down payment (often 35% or more), or even a co-signer in Canada.

2. Minimum down payment for a home purchase

For a home purchase in Quebec, the main points are:

• 5 % minimum down payment up to $500,000
• 10 % on the portion from $500,000 to $1.5 million
• Minimum 20 % if:
• Property worth more than $1.5 million
• Rental property (not inhabited by you)
• Atypical property (three-season chalet, bare land, etc.)

As newcomers, lenders also look at the source of funds:

• Saved funds (even in your home country, but transferred and documented).
• Family gift (with a gift letter).
• Savings programs such as the TFSA or the RRSP (RAP/HBP) once you are financially eligible.

3. Credit history: the big challenge for immigrants

The main obstacle for many new arrivals is the lack of credit history in Canada.

How do banks compensate for this gap?

Several options exist:

1. Newcomer program

• Some lenders will accept substituting Canadian credit with:
• A good history of rent payments,
• Utility bills (electricity, cell, etc.),
• Stable banking history (regular savings).
• Sometimes you’ll be asked for more down payment to offset the risk.

1. Build Canadian credit quickly

• Credit card (ideally one from the banking network where you will obtain your mortgage).
• Modest limit, balance paid on time each month.
• After 6 to 12 months, your file starts to become attractive for a home purchase.

1. Guarantor / co-signer

• A relative already well established in Canada can be added to the file to reassure the lender.

4. Concrete strategy for newcomers who want to buy

To maximize your chances of obtaining a mortgage:

1. Open a bank account as soon as you arrive

• Have your salary deposited into this account.
• Keep a clear record of your income.

1. Start building your credit

• Credit card, small auto loan, etc.
• Always pay on time.

1. Stabilize your employment situation

• Permanent full-time contract = big advantage.
• Avoid changing jobs just before a mortgage application.

1. Save for the down payment and fees

• Aim for at least 5 to 10 % down payment.
• Budget about 3 to 4 % of the price in fees (notary, change of ownership tax, inspections, miscellaneous SCHL insurance VAT, etc.).

1. Consult a mortgage broker specialized in newcomers

• They know the banks’ programs.
• They help position your file even with little Canadian credit history.

Conclusion: newcomers, your home purchase project is realistic

Being an immigrant or new arrivals to Quebec does not close the door to ownership; on the contrary. Yes, there are specific rules on down payments, credit, and insurance, but with:

• a minimum of preparation,
• a good understanding of the available programs,
• and the guidance of a professional,

Your home purchase can become a reality faster than you imagine.

If you’re just starting your life in Quebec, the best time to plan your mortgage is now: the earlier you structure your credit, your saving, and your file, the easier the approval will be when you find the ideal home.