Mortgage in Canada for new immigrants: how to get approval without credit history

Picture this: you've got the money for a down payment, you've never missed a payment in your life, and the bank still turns down your mortgage application. Sounds crazy, but this is exactly what thousands of newcomers face. The problem usually isn't your income—it's that to the Canadian banking system, you're basically financially invisible. Below, we'll break down why this happens and what actually works to get around it, including a step-by-step strategy that's working right now.

This article, prepared by the Immigrant.Today team, is all about mortgages for people who recently moved to Canada. One of the publication's founders, Alex Pavlenko, got a mortgage in his first year after moving, so this is totally doable.

Why Banks Say No

The main reason for rejection isn't about money or income. It's what's called credit invisibility. Canada has two main credit bureaus, Equifax and TransUnion, and they only work with Canadian credit history. Your credit history from abroad usually just doesn't count. Your perfect borrowing track record back home doesn't exist as far as the standard process is concerned. You arrive, and your credit profile isn't bad—it's just empty. You're basically a financial ghost that the bank can't see in the system.

A study by Statistics Canada with Equifax confirms how big this problem is. Among immigrants who've lived in Canada less than 2 years, 14.8% were credit invisible, while among Canadian-born families, that number is 7.5%—roughly half. But here's the good news: this gap disappears after the first 2 years. Immigrants quickly become visible, and families who've lived in the country 2 to 4 years are actually more visible to the bureaus than comparable native-born Canadians. Important note from the same study: newcomers' visibility comes mainly from credit cards, not big-ticket items like mortgages or car loans.

But there are special programs for new immigrants, which we'll talk about next.

CMHC Program for New Immigrants

The first and most powerful tool is special mortgage programs for newcomers from the Canada Mortgage and Housing Corporation (CMHC), the country's largest mortgage insurance provider. The corporation has a separate program for new residents. It's available to both permanent and temporary residents who need mortgage insurance. Temporary residents must have the legal right to work in Canada, like a valid work permit.

Here's what the key conditions look like. No minimum time living in Canada required. Down payment starts at 5%. Minimum credit score must be at least 600 for at least one borrower. If there isn't enough Canadian credit history, the corporation can look at an international credit report, a reference letter from a bank in your home country, or other ways to prove creditworthiness. Maximum property value for owner-occupied programs is capped below $1,500,000 CAD. Standard amortization period is 25 years, and through a separate product called Home Start it can go up to 30 years if at least one borrower is buying their first home.

The property itself must be located in Canada, be suitable and available for year-round living, and have year-round access. The purchase can't fall under the federal ban on non-Canadians buying property, which we'll cover in detail below.

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Important disclaimer here: this article is for general information only and isn't personal financial advice. Any mortgage decision should be made with a licensed professional. That said, here's a telling example: a newcomer got permanent resident status, found a job after 2 months, applied through this program 3 months later, and got approved.

You can calculate an estimated payment, compare rates and amortization options using the official mortgage calculator from the Canada Mortgage and Housing Corporation. Detailed program conditions for newcomers are posted on the CMHC Newcomers page.

Transferring Foreign Credit History

There's a second way to get around credit invisibility: transfer your foreign credit history into the Canadian system. In 2023, Nova Credit launched its Credit Passport service in Canada in partnership with Scotiabank, which became the first Canadian bank with this integration. RBC and BMO joined the program later. Your foreign credit file gets translated into a format Canadian banks understand. About two dozen countries are supported, including Ukraine, India, the UK, Mexico, and South Korea.

For Russian-speaking audiences, there's an important catch here. Ukraine is on the list of supported countries—data comes through the Ukrainian bureau IBCH. But Russia and Kazakhstan aren't on the list, so newcomers from these countries can't transfer their credit history through this service yet. They'll have to build Canadian credit history from scratch or rely on newcomer programs.

Major Bank Programs

Newcomer programs aren't just at CMHC—major banks have them too. The main advice here is simple: don't get stuck on one bank. Terms for new immigrants vary between banks. Some have more flexible job tenure requirements, some don't need insurance at all with a large down payment, some have their own bonuses. A rejection at one bank doesn't mean rejection everywhere. It makes sense to check out several institutions or go straight to a broker who'll compare terms for you.

Alex Pavlenko bought his first home in Canada through one of these newcomer programs, so this approach is tested from personal experience.

Foreign Buyer Ban and Tax

This is where many people make the most expensive mistake. They get pre-approved, find a place, get excited, then find out they need to pay tens or even hundreds of thousands of dollars on top. There are two different things related to buying property in Canada: the federal ban and the provincial tax. You can't mix these up.

First, the ban. There's a law prohibiting non-Canadians from buying property. It was originally introduced for 2 years starting January 1, 2023, but was extended and now runs until January 1, 2027. Permanent residents aren't affected by the ban at all—they buy on equal terms with citizens. A temporary resident with a valid work permit (exactly who the program is available to) can buy property if at the time of the transaction there are at least 183 days (about six months) left on their permit and if they haven't purchased property in Canada during the ban period.

The ban only applies in census metropolitan areas and census agglomerations—meaning big cities and surrounding areas. Outside these areas, in smaller towns and rural areas, there's no ban at all. You can check whether a specific address falls under the ban through the official CMHC page, where there's an address search tool.

Now for what used to make it nearly impossible for an immigrant to buy property in Vancouver or Toronto. This is a separate provincial tax for foreigners that has nothing to do with the federal ban. In British Columbia, foreign buyers pay an additional 20% of the property value in the Vancouver and Victoria areas and several other regions of the province. In Ontario, the tax is even tougher: 25% across the entire province, and in Toronto itself, starting in 2025, there's an extra 10%, bringing the total to 35%.

Here's the key point: even if the purchase is allowed under federal law, a temporary resident will most likely pay this tax until they get permanent residence. It doesn't apply to citizens and permanent residents, and provincial program nominees are often exempt. If someone later gets permanent resident status, the tax can be refunded, but you need to file the application on time. In Ontario, for example, a refund is possible if you become a permanent resident within 4 years of the transaction registration date. So before considering property in a major city, you absolutely need to factor this tax into your calculations, because the amounts can be huge. Current rules are available on the official pages for the Non-Resident Speculation Tax in Ontario and the Additional Property Transfer Tax in British Columbia.

Calculation with a Specific Example

Let's say someone is buying a condo for $500,000 CAD. A 5% down payment would be $25,000 CAD, and the mortgage amount would be $475,000 CAD. The loan-to-value ratio, which banks call LTV, would be 95% in this case. Since the down payment is minimal, the borrower falls into the highest bracket, and the insurance premium is 4% of the mortgage amount, which is $19,000 CAD.

There's something here that scares a lot of people unnecessarily. You don't usually pay the premium itself in cash: it's added to the mortgage principal and paid off along with the mortgage. However, the tax on this premium is paid separately at closing. In Ontario, it's 8%, which is about $1,520 CAD in our example. This is the amount you need to have in cash for the premium. But the borrower gets into the property with a minimal down payment.

It's worth adding that with a solid credit history, permanent residents can even use a non-traditional down payment, such as from an unsecured loan or line of credit. But this is only available with a minimum down payment and only for single and two-unit properties, and temporary residents aren't offered this option.

Stress Test

Even if the bank quotes a rate of, say, 4.5%, they don't qualify the borrower at that rate. This is why people with good salaries sometimes still don't make the cut. This mechanism is called the stress test. The bank takes the higher of two figures: the contract rate plus 2% or 5.25%. At a 4.5% rate, the qualification rate is 6.5%. Housing costs shouldn't exceed 39% of income, and all debts combined shouldn't exceed 44%. It makes sense to budget at the stress test rate, otherwise you might be unpleasantly surprised when applying.

Alternative Lenders

There's an option that banks don't usually talk about, but brokers know well. If the major banks refuse you, it's worth looking at alternative lenders. They're also called B-lenders, and they include Equitable Bank, Home Trust, Community Trust, and others. According to True North Mortgage, in 2025 the number of clients choosing alternative or private lenders grew by 71% year over year.

Alternative lenders typically require a down payment of at least 20%, and their rates are higher than banks'. If you go even further down to private lenders and mortgage investment corporations, rates reach around 9-10%. But any such mortgage is short-term, for 1-3 years. Essentially it's a bridge: the borrower gets a mortgage, builds history, and in a couple of years refinances at a normal rate with a regular bank. An alternative lender isn't a death sentence, it's more like a stepping stone.

Step-by-Step Strategy

Here's a step-by-step strategy for getting a mortgage in Canada even as a new immigrant.

Step one. Right after arrival, you should get a Social Insurance Number (SIN) and open a bank account. Without this number, you can't work legally in Canada or open most accounts.

Step two. You need to get a credit card to start building credit history. And here's a catch: a regular card might not be approved for a newcomer without Canadian history. About 10 years ago, a bank could easily give a newcomer a credit card with a limit of around $1,500 CAD, basically trusting someone without a job or history. But over the last few years, Canada has seen many temporary residents who racked up debts and left the country, so requirements have tightened. On the other hand, many banks have newcomer packages where they'll give you a card even without local history, and you should definitely ask about those. If you get rejected everywhere, a secured card will save you. Here's how it works: the borrower deposits, say, $1,000 CAD, and exactly that amount becomes their credit limit. The bank isn't risking anything since they already have the money, but the borrower is building real credit history. You should spend no more than a third of the limit and pay everything on time.

Step three. Don't apply for multiple credit products simultaneously. Each inquiry can lower your credit score.

Step four. Collect proof of payment discipline. This includes rental history, utility payments, phone, insurance, and letters from your home country bank. The more proof of reliable bill payment, the more comfortable the bank feels.

Step five. Even before looking for property, it makes sense to get mortgage pre-approval. The bank looks at your income and tells you how much they're willing to lend in principle. But don't treat this as a guarantee: it's a preliminary assessment, and the bank will make the final decision on a specific property.

Step six. You need to calculate all closing costs in advance, and it's far from just the down payment. This includes land transfer tax, legal fees, property appraisal, home inspection, moving costs, tax on the insurance premium, and for temporary residents, the foreign buyer tax as well. In total, this can easily run into tens of thousands of dollars, and you need this money in cash.

Bottom Line

Programs for new immigrants do exist, you just need to know about them and verify the rules. If you have doubts, it's worth contacting a mortgage broker who works specifically with new immigrants: they'll find a program and lender for your specific situation. Most often their services are free to the borrower because the broker gets paid a commission by the bank.

If you're just planning a move to Canada or want to assess your immigration chances, you can book a consultation with licensed immigration consultant Ivanna Pavlenko: Canadian immigration prospects assessment.