Buying a Home as a Newcomer in Canada (2026)

Owning a home is a major goal for many newcomers to Canada. The good news is that permanent residents can purchase property in Canada with the same rights as citizens. Even some temporary residents can buy. But there are rules, costs, and processes you need to understand first. This guide breaks it all down for newcomers in 2026.

Can Newcomers Buy a Home in Canada?

The rules changed in 2023-2024 with Canada's Prohibition on the Purchase of Residential Property by Non-Canadians Act (sometimes called the "foreign buyer ban"). Here's the current status for 2026:

• Canadian citizens: Full right to purchase any residential property
• Permanent residents: Full right to purchase, no restrictions
• Work permit holders: May purchase ONE residential property if they have a valid work permit and intend to live in it. Must have worked in Canada for at least 3 of the last 4 years and have filed tax returns.
• Study permit holders: May purchase ONE property under specific conditions (enrollment in designated learning institution, intend to live in home, property value under $500,000 in many cases)
• Visitor visa / no immigration status: Generally cannot purchase residential property in Canada

How Much Down Payment Do You Need?

In Canada, the minimum down payment depends on the purchase price:

• Under $500,000: 5% minimum down payment
• $500,000 to $999,999: 5% on first $500K + 10% on the remainder
• $1,000,000+: 20% minimum (no CMHC insurance available)

If your down payment is less than 20%, you must buy mortgage default insurance (CMHC insurance). This adds a premium of 2.8-4.0% to your mortgage, which is added to your loan amount.

As a Newcomer, How Much Down Payment Is Really Needed?

While the legal minimum is 5%, newcomers typically need 10-20% because lenders add extra requirements for those with limited Canadian credit history or short employment history in Canada. The more Canadian credit history and employment history you have, the easier it is to qualify with a lower down payment.

Getting a Mortgage as a Newcomer

Lenders want to see:

• Canadian credit score: Typically 650+ minimum, 700+ preferred
• Canadian employment income: Usually 2+ years preferred, but some lenders accept 1 year with strong documents
• Down payment: Must be verifiable (bank statements showing funds over 90 days)
• Debt-to-income ratio: Total housing costs should be under 39% of gross income; total debt under 44%

All major banks have "newcomer mortgage" programs that consider foreign income or employment letters. RBC, TD, Scotiabank, and BMO all offer these.

Costs of Buying a Home in Canada — Beyond the Purchase Price

Steps to Buying Your First Home as a Newcomer

1. Build your credit: Aim for 650+ minimum, 700+ ideal. Takes 1-3 years from arrival.
2. Save your down payment: Keep funds in a Canadian bank account for 90+ days before applying for a mortgage (lenders will ask for 90-day bank statements)
3. Get mortgage pre-approval: Visit multiple banks and mortgage brokers to compare rates
4. Find a real estate agent: Look for one with newcomer experience and who speaks your language
5. Make an offer: Your agent helps draft the offer to purchase
6. Home inspection: Always get one before finalizing the purchase
7. Hire a real estate lawyer: Required in Canada to close the transaction
8. Close: Transfer funds, sign documents, get your keys

First-Time Homebuyer Benefits for Newcomers

• First Home Savings Account (FHSA): Tax-free savings up to $8,000/year ($40,000 lifetime) for first-time buyers
• Home Buyers' Plan (HBP): Withdraw up to $60,000 from your RRSP tax-free for a first home purchase
• First-Time Home Buyers' Tax Credit: $1,500 tax credit available to first-time buyers
• GST/HST New Housing Rebate: Partial rebate of GST/HST on new construction purchases

Related Guides

• Getting a Mortgage as a Newcomer
• Land Transfer Tax for Newcomers
• Building Credit for a Mortgage
• Credit History Building Guide