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What are the Rules about Children Sharing Bedrooms?

These guidelines define how many children can share a bedroom based on age and gender.

How Many People Can Share a Bedroom?

The National Occupancy Standard (NOS) was created to support the design and evaluation of housing policies and programs in Canada. It is a reference point for “suitable” housing to inform how many people could reasonably live in a dwelling based on the number of bedrooms. While newcomers want to know what the “rules” are about children sharing bedrooms, the NOS is NOT a rule to determine if a dwelling unit can be rented to a family. Rather, the standard refers to criteria to assess if housing is suitable.

What is Housing Suitability?

According to the NOS, a private household has suitable housing when there are enough bedrooms for the family based on age, gender, and relationships among household members. 


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The following criteria can help you assess whether or not a dwelling is suitable for you and your family:

  • A maximum of two people can share a bedroom
  • Household members who are married or a common-law couple can share a bedroom with their spouse or common-law partner.
  • Household members over 18 years have a separate bedroom
  • Single parents have a separate bedroom from their children
  • Children under 5 years, either of the same gender or the opposite gender may share a bedroom to reduce the number of bedrooms you require
  • Children under 18 years of the same gender can share a bedroom
  • A child aged 5 – 17 years should not share a bedroom with a child under 5 of the opposite gender.

Why is Suitable Housing Important?


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When homes are overcrowded, it may contribute to health and safety issues, in addition to privacy concerns. Furthermore, overcrowded households can be an indicator that a lack of affordable housing exists in Canada. Given the current housing supply issue, the Canadian government is introducing housing programs to increase the housing supply and provide cost relief.

The NOS can help you determine the number of bedrooms you will need to ensure suitable housing. The size of the house you need depends on your family’s size and structure. For example, if you have a family of six with two parents and four daughters, you can select a three-bedroom room. However, if you have three sons and one daughter, you may need four bedrooms.

However, you’ll also have to consider other factors such as affordability, cultural conventions, and how urgently you require housing. Once you determine how many bedrooms you require based on your family size, you can use this information to begin your housing search. Or, you can work with a real estate agent who can help you search for suitable housing based on this information.

If you have a large family, suitable accommodation will require more bedrooms. This, in turn, will increase the cost of accommodation.

Three young children lying on a bed and reading a book. Their faces are blurred and their feet are clearly visible. Rules about children sharing bedrooms.
The NOS provides criteria for how many children can share a bedroom based on age and gender.

Is this National Occupancy Standard Enforced?

Ideally, it’s up to you and your family to decide how many bedrooms you will need based on your circumstances and budget. It’s also important to know that landlords cannot refuse to rent out their property because of the size of your family. The NOS cannot be used as a reason to discriminate against prospective tenants. Nor is the standard meant to be enforced.


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What are the Advantages of Children Sharing a Bedroom?

Sharing a bedroom can contribute to lower housing costs and hydro costs In addition, siblings who share a room spend more time with each other and develop a closer relationship. Children who share a room learn how to compromise and accommodate others. However, when friends come over, sharing a room can cause conflicts among siblings.

Picture of four young happy siblings and a small baby. Rules about sharing a bedroom.

What are the Disadvantages of Sharing a Room?

Having separate bedrooms requires a bigger property, which will increase your housing costs. At the same time, the hydro bill will increase as a family will use more lights, heating, and air conditioning.

If siblings share a room and are of different ages, their bedtimes might differ. Or, concentrating on studies could become a challenge when siblings have conflicting schedules for study and playtime.

If siblings sharing a bedroom have different standards in terms of cleanliness, neatness, and organization, it can lead to conflicts. If siblings are of different genders, privacy would be an issue, especially when dressing.

What to Consider When Deciding the Size of Your Home

When deciding the size of the house, think about your budget. You should be able to afford the property you will live in, including the cost of utilities. There are ways to create separate spaces by adding curtains and room separators.

Consider your children’s ages, genders, and personalities so safety, privacy, and sanity are not compromised.

Searching for more information about living and working in Canada? Be sure to check out our upcoming free webinars.

First Time Home Buyer: Newcomer Tips

First Time Home Buyer: Newcomer Tips

First time home buyer newcomer tips

For many newcomers, owning a home in Canada is a  source of pride, satisfaction, and accomplishment! And buying a home is also an investment that grows over time and provides a great financial benefit. But before jumping in, consider these vital first-time home buyer tips!

Buying your first home is an expensive decision. And, it will likely be the biggest purchase that you make in your lifetime. So you want to ensure that you understand exactly what’s involved. Buying a home in Canada may be quite different than in your home country. From the home buying process to the types of homes and styles, the layouts, and the materials, there can be many differences.


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Should You Rent or Buy a Home?

Many newcomers arrive in Canada with savings to buy their first home. In fact, a 2019 survey conducted by Royal LePage revealed that newcomers represent a growing segment of the Canadian real estate market. Some of the findings showed that newcomers:

  • represent 1 in 5 homebuyers across Canada
  • live in Canada for about three years before they purchase a home
  • arrive with savings intended to buy a home.

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It makes sense that newcomers are eager to enter the Canadian real estate market. Indeed, owning your own home is exciting for many reasons. Homeownership can be a great investment and a way to build personal wealth. Young families may want more space with a backyard for children to play. Or, buying a home in Canada may be an important part of your immigration dream!

But rarely do people have enough money to buy a home outright. And this is where lenders can help you by giving you a loan, also known as a mortgage. But, you will have to have enough savings to pay for a down payment before you can get approved for a mortgage. 

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What’s a Down Payment?

Essentially, a down payment is a portion you put down towards the value of your home right up front. If you don’t have enough for a down payment, you’ll have to build your savings. You subtract the down payment from the purchase price of the home and you supplement the remaining cost with a mortgage.

In addition to saving money for a down payment, there are other costs that you will have to pay, such as closing costs. It’s important to factor in the closing costs because they can be costly and often take first-time homebuyers by surprise.

So before you rush into buying a home, it’s important to understand all the costs involved for a first-time home buyer in Canada. 


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When Renting a Home Makes Sense

If you have recently arrived in Canada, you’ll discover many things in the city you have landed in. And, you may discover that you love the city and want to make it your home. On the other hand, you may learn that it’s not quite what you had expected. Or, you may land a job in a different city and want to relocate to another region or city in Canada. When you first arrive in Canada, it’s best to continue renting until you’re certain about where you want to live long-term. 

Renting a home versus buying a home makes sense if you:

  • Are not certain where you want to live (what neighbourhood or city?) 
  • Have not yet landed a permanent job
  • Expect your financial situation will change over the next year or so
  • Need time to save for a down payment.

When Buying a Home Makes Sense

A large advantage of buying a house is the sense of pride that comes from owning your home in Canada. In addition, you become a part of a community where you know your neighbours and gain a sense of belonging. And most importantly, you’ll gain financial benefits when you: 

  • Pay down your mortgage over a period of time
  • Create wealth and build equity in your home.

In general, it makes sense to buy a home if you plan to remain in the city for five years or more. 

Three Financial First Steps Before You Buy a Home

Before you become a first-time homebuyer, you need to prepare to meet new financial obligations. And these are three important steps to take before you buy a home:

1. Establish Credit History:

When buying a home as a newcomer, you also have to establish your credit history in Canada. You can begin to build your credit by getting a credit card, or applying for a small loan and making regular payments. 

2. Build an Emergency Fund:

Another important factor to consider before you buy a home is how stable your financial situation is. When you decide to purchase a home, you need financial discipline. For example, it’s important to save money for an emergency fund. When you own a home or a condo, you need to set aside money to deal with unexpected issues such as a leaky roof, basement flooding, or a burst pipe.  Any of these expenses could be thousands of dollars.

3. Save for a Down Payment:

 Most importantly, you need to save for your down payment. However, with as little as just a five percent down payment, along with mortgage insurance, you can actually own your home in Canada.

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What’s the Minimum Down Payment Rule in Canada?

In Canada, the minimum down payment is the percentage of the home’s purchase price. And depending on the house price, the minimum down payment amounts vary.

For example, the minimum down payment is:  

  • 5% for the portion of a home’s purchase price below $500,000
  • 10% for the portion of the purchase price from $500,000 to $999,999 (plus 5% for the value below $500.000)
  • 20% for homes that are valued at greater than $1 million.

Until you have made some firm decisions, it may make more sense to continue renting a home before you buy a home.

Important Questions for First-Time Home Buyers

In addition to thinking about financial first steps, you’ll also need to consider other practical questions such as:

How Much Can You Afford?

As a guideline, financial experts state that you should not pay more than 30% – 32% of your total household income for housing and home-ownership costs such as:

  • Mortgage interest
  • Property taxes
  • Maintenance.

But, that’s a guideline. You may decide that you’ll budget more for housing or, cut back on other discretionary expenses such as entertainment or dining out. Read more about mortgage affordability.

Can You Get Pre-approved for a Mortgage?

A mortgage pre-approval means that a lender has stated that you qualify for a mortgage loan based on your current income and credit history. The pre-approval will indicate the:

  • Pre-approval term (usually 90 – 120 days)
  • Interest rate
  • Mortgage amount.

The lender will assess your financial situation and determine how much they are willing to lend to you to buy your house. This will give you confidence when choosing which homes to consider buying. It will also help when you make an offer on a property because the buyer knows you are serious and able to make the purchase.

What Home is Right for You?

When you’re ready to search for a home, you need to consider:

  • What do you need and want in your house? (number of bedrooms, bathrooms, storage needs, etc)
  • What’s in the neighbourhood? (is it close to schools, work, shopping, parks, place of worship, public transportation, and other services?)
  • What type of house do you want to live in? (condominium, detached or semi-detached home, townhouse, duplex, or triplex)

When you answer these questions, you can narrow down your house search to find the ideal home for your needs. You can also provide this information to your realtor who can help you find your ideal home in Canada. Realtors are trained and licensed to help you find and buy a resale property. You may decide to choose an agent who has sold other properties in the areas that you are considering. Or, you may choose a realtor that a friend or family member recommends.

Talk to the realtor about the things that are important to you in a home, but keep a realistic approach. Many Canadians buy what is called a “starter home” and then they work their way up the property ladder. Be ready to accept that your price range may not cover all the features you want in a house.

You do not pay for the services of a realtor. Realtors earn their money by keeping a commission on the selling price of the house that they help to sell. The commission is paid by the seller, not by you the buyer.

Making an Offer

Once you’ve found a property that you want, you’ll want to make an offer. An offer represents your desire to purchase the property and the amount that you’re willing to pay for it.

Your real estate agent can usually give you advice about the price you should offer on a resale home based on your local market conditions and recent home sales in the neighborhood.

After agreeing on a price, the seller will stop showing the property to other prospective buyers because the home is now ‘conditionally sold’ to you, and will begin to take the necessary steps to complete the transaction.

Similarly, you will also need to begin taking steps to fulfill your part of the purchase process, including any conditions you may have listed in your offer such as a home inspection or finalizing financing. These vary by location, and your realtor is a good person to ask about the next steps.

Typically, the offer-to-purchase agreement will include:

Property Details:

This is a detailed description of the residence’s address, including street name, house, lot, and block number. It will also often include a list of additional items included in the sale (appliances, garage door openers window coverings, etc).

Transaction Details:

Here a clearly-stated purchase price that both parties have deemed acceptable will appear. There will also be a description of the deposit amount here. A deposit demonstrates that you are serious about your offer, and will persuade the seller to not entertain any further offers. The Offer will also often contain the payment method (cheque, credit card, etc.), as well as mention who will hold the deposit.

Closing Date:

This is the date when the property becomes yours and you are free to move in. By this time, any previous owner is expected to have removed all of their belongings and cleared any of the conditions you may have imposed.

A Statement of Transfer of Insurances and Warranties and Representations:

Typically, the seller is responsible for the property until the closing date and guarantees that they have the legal right to sell the property. They also guarantee that all buildings and improvements do not encroach upon neighbouring lands.

Additional Terms:

Here you’d place any additional modifications or improvements to the property that have been agreed upon by both seller and buyer.

Conditions:

This is where you’ll typically find a list of agreed-upon conditions of sale, the breach of which could result in a nullification of the purchase agreement. This could include a description of financing conditions, property inspection conditions, condominium documents conditions, and the sale of buyer’s home conditions.

Closing Costs When Buying a Home

In addition to your mortgage, there are several closing costs that you must pay before you can take possession of your house. To “take possession” means the home is now legally yours. First-time home buyers are very often surprised when they learn of these additional costs. Examples of closing costs that you can expect to pay include:

Appraisal Fee:

This is the cost for an appraiser to assess the property value. Your mortgage lender may require an appraisal to determine whether the selling price is reasonable for the market.

GST:

You must pay the Goods and Service Tax (or Harmonized Sales Tax) on a newly constructed or substantially renovated home. Resale homes do not require a GST payment.

Land Transfer Tax:

This is a tax charged to buyers in most provinces, usually based on the purchase price.

Mortgage Default Insurance:

High-ratio mortgages (those with less than 20% down payment) require mortgage default insurance. The cost is usually added to the mortgage it varies depending on the amount of your down payment.

Mortgage Life Insurance:

Special insurance coverage to cover the cost of your mortgage in the event of death or severe illness is available from most lenders.

Home Inspection Fee:

Hiring a home inspector is voluntary but recommended for resale homes, and usually, the cost ranges from $400-$600. With a home inspection, you may discover issues with the house that will cause you to back out of your offer altogether. Or, the home issues may be manageable and you could ask for a lower purchase price to offset any repair expenses.

As well, you may want to bring in trades such as an electrician, a plumber, and perhaps a structural specialist to ensure you understand all the home systems. They can also provide cost estimates for repairs if needed.

Why You Need a Home Inspection When Buying a Home

When you buy a home, it’s important to conduct a home inspection. This is usually done before you make an offer, and the offer is usually conditional upon inspection. When inspecting a house, a home inspector will look for:

Foundation: home inspectors will look to see if there is a leak in a foundation wall and whether insulation is in place. If there’s an active leak, they will determine the condition behind the wall.

Plumbing: an inspector will determine if the drains are installed properly and not leaking.

Windows: the inspector will make sure that the window seals are not damaged. For example, if one of the windows gets fogged, that tells that the window has to be replaced. Next, the home inspector will look at the frame to see if there are any openings that have to be resealed; otherwise, you may get an air leakage.

Furnace: the home inspector will check the quality of the filter and whether it is installed properly. They will check the quality and age of the furnace itself and whether it’s leaking any water inside or gas, which could be very critical.

Mold:  an inspector will also look for mold (or termites) in the house because it can result in significant costs to repair later.

First-Time Home Buyer Tips for Newcomers

Be Informed: Take advantage of free tools and resources to learn about buying a home as a newcomer and learn about mortgage deals for newcomers.

Know How Much You Can Afford: You can use online mortgage calculators that will give you approximate costs, and monthly mortgage payments.

Get a Pre-Approved Mortgage: You can talk to your lender about getting a pre-approved mortgage certificate.

Use a Realtor: There are many different real estate companies in Canada and many agents to choose from.

Get a Real Estate Lawyer: A real estate lawyer will review your purchase agreement contract. The wording in these contracts is very important and your lawyer will make sure everything is done properly in terms of the law.

Prepare a Budget: Plan for your home closing costs or the costs associated with the date on which you actually take possession of your home.

When buying a home in Canada, it’s vital to consider these first-time home buyer tips. Learn the essentials and become informed about everything that’s involved. Homeownership provides great pride, security, and achievement. And when you’re informed about your home buying decisions, you’ll feel confident about your purchasing decisions!

For more information, tools, and free webinars about living in Canada visit our Settling in Canada resource page. We’ll help you to settle in Canada successfully!

Maintaining Your Rental House | Smart Tips to Know

Maintaining Your Rental House | Smart Tips to Know

When you first move to Canada, it is very likely that you will have a rental house or apartment before you buy a home. Renting a house has many benefits over owning one, especially for newcomers. Not only is renting a home cheaper but it also gives you the flexibility to move to another area. Renting your first home in Canada will also allow you to find the best locations in the city before buying a house.

Even if you don’t own the home, treat a rental like it’s your home to create a happy and pleasant oasis. These maintenance tips will help you keep your rental in top condition. And your landlord plays a key role. A great landlord will ensure that you get any repair or maintenance jobs done quickly. Understanding who is responsible for specific maintenance activities can help you to work together and avoid conflict.


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Work with Your Landlord to Keep Your Rental House in Good Condition

While you are renting, it’s important to keep your home in a liveable condition. While you may not own the rental, you want to make it a pleasant environment. So it’s important to work together with your landlord to keep your rental house in a safe, clean, and liveable condition. Remember, the landlord cares about your rental home as much as you do. So it’s in the best interest of both you and the landlord to maintain it well. This will also serve to build a good relationship with your landlord! And a glowing reference from a landlord about how well you take care of their property can be helpful if you move to another rental house in the future.

Take an Active Role in Maintaining Your Rental House


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Keeping your rental house or apartment in good shape requires the full involvement of both you and your landlord. Your landlord is responsible for keeping your rental home in good shape but they cannot do that without your help. For example, if you notice a leak in the ceiling or the washing machine stops working, it is a good idea to contact the landlord right away. Your landlord will come within a few days at an agreed time to fix the issue. Small repairs can become very expensive problems if not resolved quickly. So your landlord will appreciate you reporting issues early!

There is a good chance your landlord knows the rental home better than you do. They might have renovated it or even lived in it in the past. Because of this, it is a good idea to allow the landlord to come for regular home inspections. Your landlord might see a major fault that you missed such as poor drainage that could cause your walls to rot. These faults can easily be avoided ahead of time if spotted and there is a high chance your landlord will spot one of these faults during an inspection.

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What Maintenance is Your Landlord Responsible For?

It is also important to know the responsibilities of your landlord. Knowing this will make sure that the relationship between you and your landlord remains equal and cannot be exploited. Your landlord is responsible for maintaining your rental home and making sure it remains in a good, liveable condition. This includes making sure that the rental meets municipal standards and has no faults such as plumbing leaks or appliance breakdowns. Your landlord is responsible for completing maintenance jobs as soon as they arise.

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Another responsibility your landlord has is repairing or replacing any appliances that came with the rental home. However, you may have to pay for the cost of repairing any appliances if you or your guests caused the damage. Or if you rent a furnished home or apartment you are responsible for any damage to the contents. For example, if you break a table that came with the rental home, you will be responsible for fixing or replacing it. However, if the repairs are due to normal wear and tear, the landlord will cover them.

The landlord is also responsible for any heating, plumbing or electricity repairs in your rental home. Utilities, such as water, electricity, and internet may or may not be covered by your landlord. This is something that you will discuss with your landlord before you move into your rental home. These details will also be outlined in your rental house lease agreement.

Keep in mind that most municipalities have by-laws that set minimum standards that landlords must meet related to utilities. So be sure to visit your municipality’s website to learn more.

Your landlord may ask you to enter your rental home or apartment from time to time to inspect its condition or do repair jobs. And as long as they inform you ahead of time, you must legally allow your landlord to enter. However, they must tell you ahead of time, when and why they will be coming. If the timing doesn’t work for you, you can ask to arrange another time. 

Deal with Emergencies in Your Rental House

If you experience an emergency, for example, water starts leaking through your ceiling or roof, or your furnace breaks down in the winter, contact your landlord immediately. Leave a message and note the date and time of your call if you’re unable to reach your landlord. However, if repairs must be performed immediately to protect your health and safety or to prevent property damage, you may be able to authorize the repair work yourself. In this case, be sure to keep all documentation related to the repair and ask the repair company to bill your landlord directly. Or, if you pay any bills, keep track of your expenses so that your landlord can reimburse you.

Why Should You Permit Entry to Your Landlord?

There are laws concerning tenant rights and giving tenants the freedom to enjoy their rental house without the landlord interfering. However, your landlord does have the right to enter your rental to inspect or do repairs. Each province has its own slightly different laws but the idea is the same. As long as your landlord gives you a 24-hour notice before coming, they can enter your rental.

And really, even if the law didn’t support it, there is no reason to deny entry to your landlord as long as they have a valid reason. Your landlord wouldn’t want to harm your home. After all, even if your landlord isn’t living in your rental home, they still legally own it.

Learn more about your rights as a new renter. For more helpful information about rental housing, be sure to check out Rentals for Newcomers.

When Will the Landlord Need Access to Your Rental House?

There are times when your landlord may need to access your rental house. Here are two common reasons and what it means for you, the renter.

1. Conduct Regular Inspections

A conscientious landlord will conduct home inspections once or twice a year. There could be major faults in your rental house that you do not identify. There is a good chance that your landlord will find one of these faults and arrange a time with you to come fix it.

2. Complete General Repairs and Maintenance

The most common reason your landlord will want to enter your rental home is for general repairs and maintenance. This could be anything from replacing an outdated appliance to fixing a clogged drain. As mentioned above, the landlord will complete most maintenance jobs. However, some maintenance responsibilities may fall to you as the tenant. To learn more about how maintenance responsibilities are shared in Ontario, click here. Keep in mind that each province has its own rules and regulations regarding laws on maintenance responsibilities. However, most provinces have many common tenant/ landlord laws.

There are laws concerning tenant rights and giving tenants the freedom to enjoy their rental house without the landlord interfering. However, your landlord does have the right to enter your rental to inspect or do repairs. Each province has its own slightly different laws but the idea is the same. As long as your landlord gives you a 24-hour notice before coming, they can enter your rental.

And really, even if the law didn’t support it, there is no reason to deny entry to your landlord as long as they have a valid reason. Your landlord wouldn’t want to harm your home. After all, even if your landlord isn’t living in your rental home, they still legally own it.

Learn more about your rights as a new renter.

Keep Your House in Safe Condition with these Smart Tips

  • Get familiar with the security and safety features of your rental house or apartment building. Make sure the doors have good quality locks and that the windows fully close and lock.
  • Always be careful who you let into your home or building.
  • Clean your home often and well to avoid attracting pests. Never leave open food or garbage out, and get rid of or donate anything you don’t need.
  • Use bathroom and kitchen fans to control humidity, and buy a dehumidifier if necessary.
  • Report mold issues to your landlord immediately. Mold presents a serious health risk, especially if your or other family members suffer from asthma, allergies or other respiratory ailments. Mold appears fuzzy, powdery, and can be light green, brown or black.

Fire Prevention Tips

  • Avoid overcrowding outlets with too many appliances and make sure outlet strips are not covered.
  • Follow no smoking rules that your landlord may have.
  • Keep curtains and other flammable materials away from lights and candles.
  • Never leave food unattended on stoves or in microwaves.
  • Clean grease from pans, cooktops, fans, and nearby surfaces regularly.
  • Make sure there are functioning smoke detectors in the rental and test them monthly.
  • Invest in a carbon monoxide detector, as the gas is odorless and extremely dangerous.

Keeping your rental in top living condition will ensure that you are safe, secure, and comfortable. And working with your landlord to achieve this goal will provide benefits for both you and your landlord!

For more information, tools, and free webinars about rental housing in Canada, be sure to visit Rentals for Newcomers.

How to Qualify for a Mortgage in Canada

How to Qualify for a Mortgage in Canada

One of the first things new immigrants want to establish when they move to Canada is somewhere they can call home. Your ability to buy a home and qualify for a mortgage is tied together if you do not have the funds to purchase a property outright. 

You will need to meet certain financial criteria as set out by Canadian banks and financial institutions. This may seem intimidating and even challenging, largely because of misconceptions. 


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There is a belief that newcomers cannot get a mortgage from a Canadian bank, they won’t qualify if they don’t have a strong credit history or they won’t qualify until they have a couple of years of employment history in Canada. These are not true. 


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There are many immigrants who qualify for mortgages every day. In fact, did you know that 18% of mortgage consumers are newcomers to Canada? 

Requirements for Newcomers to Qualify for a Mortgage

Financing is available to both permanent and non-permanent residents. However, qualifying for a mortgage will depend on your status. Here is an overview of mortgage requirements:

Permanent Resident Mortgage Requirements

As a permanent resident, you will have access to a variety of mortgages and programs. You could qualify for a standard mortgage if you have a good credit rating. This means one of the applicants must have a credit score of 680 or higher. You will also require at least a 5% down payment. 

If you do not have a good credit score, you can still qualify for a mortgage through a newcomer to Canada program. You will still require a minimum 5% down payment. 

If you are paying less than 20% of the cost of the purchase price, you will have to get mortgage loan insurance


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Non-Permanent Resident Mortgage Requirements

As a non-permanent resident, you have specific requirements to qualify for a mortgage. For example, you must:

  • be legally authorized to work in Canada
  • have a work permit
  • purchase a property you will live in
  • put down a minimum of a 10% down payment.

With a good credit rating, you could qualify for a standard mortgage. If you do not have established credit in Canada, you may have to get a letter of reference from your financial institution from your country of origin. You will need to qualify under a new to Canada program. 

You will not qualify for a mortgage if you are not a permanent resident, have poor credit, and do not have at least a 10% down payment. 

What Lenders Review When Qualifying for a Mortgage

Your Income:

When applying for a mortgage, a lender will review your income. This can be from many sources as long as the income is plausible, such as income from full or part-time employment, self-employment, rental properties, support or alimony payments, or pensions.

The lender will require a letter from your full or part-time employer to confirm income, especially if you have had the job for less than two years. You should have copies of your last two year’s tax returns and be up-to-date with any outstanding taxes.

Your Debt:

The lender will also look at your debts, including your proposed house payment, as well as monthly payments for loans, credit cards, car leases or child support. It is important that you include all debts you have on your mortgage application as they can impact your ability to borrow.

Your Employment History:

Evidence of regular income is another critical factor lenders consider. They are more inclined to favor applicants who have worked at one job continuously for several years or have remained in the same field. However, you can still qualify for a mortgage if you’ve changed jobs recently as long as your new employer can prove your income with a Letter of Employment to confirm your:

  • Date of hire
  • Position
  • Rate of Pay

They may also ask for recent pay stubs to confirm your rate of pay.

If you’re self-employed or have worked at a job for less than two years, lenders may ask for additional information, such as federal income tax statements, to verify your income.

Your Credit History:

To qualify for a mortgage, a good credit rating is essential. In addition to reviewing your debt and income, a lender will also pull your credit report. The report details your payment history and how you’ve handled your past obligations. You can get a copy of your credit report before you apply for a mortgage to veryify its accuracy or correct any errors before you apply for a mortgage. However, each credit “pull” will negatively impact your credit score for a short period of time, so avoid pulling your credit too often.

Tips To Qualify for a Mortgage In Canada

Qualifying for a mortgage ensures that you meet certain criteria set out by lenders. Here are the main steps you will need to take to qualify:

Save for a Down Payment to Qualify for a Mortgage:

You will have to put money down on any mortgage. The more you save, the better position you will be in to qualify for a mortgage. 

Establish Credit in Canada:

As soon as you arrive in Canada, its important to start building your credit history. A strong score will not only help you qualify for a mortgage, but it will also help you get a better rate. You can do this by paying your bills in full each month, use and pay off your credit cards, and maintain a consistent source of employment income. 

Have Proof of your Financial Situation to Qualify for a Mortgage:

Lenders want to see proof of a stable financial situation. To do this, you can get a letter of reference from your financial institution, an employment letter from your employers, and show copies of recent pay stubs. 

Shop Around:

There are plenty of mortgage options. You can choose from traditional banks, to credit unions, and private lenders. You can also enlist the services of a mortgage broker to help you qualify. Brokers work for you, and they will shop around and compare options for you. They can be a big help to find the right mortgage for your specific needs. 

Getting a Pre-approved Mortgage? 4 Tips to Consider

A pre-approved mortgage indicates how how much mortgage you can afford and guarantees a mortgage rate (usually for 90 – 120 days) while you look for a home.

A pre-approved mortgage can give you more credibility to sellers and real estate agents, And in bidding wars, common in hot housing markets, it can give you an advantage against competing home buyers. However, be sure to consider these tips:

1. Know the Difference: Pre-qualified versus Pre-approved


Understand the difference between pre-qualification and pre-approval. For example, pre-qualification is less formal and confirms that you meet general lending guidelines. And sometimes you can obtain a pre-qualification over the phone or through an online assessment.

On the other hand, a pre-approval is a detailed process and takes more time to complete. You need to complete a mortgage application and provide documents to verify things such as your income, debt, employment, and credit history.

A lender will review your application before they pre-approve you.

2. Watch Your Finances after Pre-approval


Don’t let your guard down after you get pre-approved for a mortgage. Missing or skipping credit card payments, increasing debt, or changing jobs could void your pre-approval.

3. Reset Pre-approval Rates


If rates remain low and you’re still searching for a home, you can reset your pre-approval every 45-75 days. Doing so will not only extend your rate hold but will safeguard you against any mortgage rate hikes before you close. Although, some lenders may restrict rate resets.

4. Know the Pre-approval Terms


Shop around and choose pre-approval terms that offer you the most benefits. For example, opt for the longest rate hold (120 days), and other mortgage features such as the ability to make prepayments, fair penalties, and refinancing options.

Qualifying for a mortgage can be an intimidating process, but it does not have to be this way. There are countless ways for newcomers to get approved for a mortgage. It happens every day. You just need to know the steps and understand the financial criteria you need to meet to qualify. Start working toward qualifying from the day you move to Canada, and you will be a homeowner sooner than you think.


For more information about your financial first steps in Canada, visit our banking in Canada resource page. Get the essential information you need to manage your finances in Canada!

How Much Mortgage Can I Afford?

How Much Mortgage Can I Afford?

what mortgage can I afford

The question “how much mortgage can I afford?” is quite different from “how much mortgage can I get?” So, it’s important to understand the risks involved when a lender offers you a mortgage that is more than you need or expected. When buying a home for the first time, it’s important to consider all of the related costs and expenses. And, when you factor in all of the costs, you’ll be in a better position to answer, “how much mortgage can I afford?”

It may seem like great news to get approved for a higher mortgage amount than you expect. But, this can lead to overspending on housing when you get more money than you need.


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The Key Question: How Much Mortgage Can I Afford?

Buying a home in Canada is a big dream for many newcomers! But, buying a home that is more than you can afford, can turn that dream into a financial nightmare. If you have a good credit history, and a healthy down payment, your lender may approve you for a mortgage that is higher than what you need.  For example, you may have a personal budget of $800,000 to buy your home. And, your lender may pre-approve you for $1,000.000. To get a general idea of how much mortgage you can afford, use this mortgage calculator.


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But, does that mean you should borrow that much so you can buy a more expensive home?  You need to factor in other costs so that you can answer this key question: how much mortgage can I afford?

This is a common mistake that many first-time homebuyers make. And, this often leads homeowners to a situation where they are “house rich and cash poor”. In other words, they are spending between 30 – 40% (or more) of their total income on:

  • mortgage payments
  • property taxes
  • maintenance and utilities.
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When you spend too much of your income on housing, it means you’ll be “cash poor”.  And this means you’ll have very little room to afford other expenses such as: 

  • car payments
  • a planned vacation
  • home furnishing or decorating (especially if you’re moving into a larger space).

Or, you end up making these purchases on credit, increasing your debt level, and possibly affecting your credit history.

buying a home and decorating

In addition, you need to consider your other expenses such as daycare, saving for retirement, or saving for your children’s education. All important expenses that you may also be saving for.

So, before buying your home, carefully consider how much you can afford and what other financial obligations you have.

Costs to Include When Asking: How Much Mortgage Can I Afford?

Closing costs are typically paid at the end of the homebuying process. Often, people overlook the closing cost that can become expensive. You can expect to pay closing costs in the range of 1.5 – 4 % of the selling price of your home. So, it’s important to include these costs when calculating how much mortgage you can afford.

Closing costs are one-time only expenses that may include:

Home Inspection Fee:

Getting a home inspection is not required. However, if you are buying a home, it may be a smart thing to consider. A home inspection can provide you with information about the state of the house. You may discover that you will have to spend money on repairs either in the short-term or long-term. 

You also want to find out what recent repairs or renovations were completed. A home inspection can provide information about the: insulation; electrical work; and structure.

If the home inspection reveals costly defects, you can try to negotiate with the seller to make the repairs or reduce the selling price.

Property Taxes: 

Homeowners in Canada must pay taxes to fund services such as police and fire, schools, public education, transit, parks and recreation, road maintenance, and many other services. And, property taxes are a major source of revenue for municipalities in Canada.

On top of your mortgage payments, you will have to pay property taxes. Most lenders will collect the property tax and this helps you to avoid a large and unexpected tax bill when your annual taxes are due. So, it’s important to factor your property taxes into your mortgage payments as well.

These legal costs include fees for services that your real estate lawyer will do such as:

  • Conduct a title search
  • Review all legal documents
  • Review the Agreement of Purchase or Agreement of Sale (for condominiums)
  • Draft a title deed
  • Prepare the mortgage and registration fee
  • Calculate the land transfer fee.

Land Transfer Fee:

This is a tax that home buyers in most provinces must pay. And, It is usually based on the purchase price of the home.

Property Insurance

Since your lender has a large stake in your home, they will often require you to purchase insurance against fire and weather-related damage. It is also a good idea for you to purchase ‘contents’ insurance to protect your valuables.

Mortgage Life Insurance

This is special insurance coverage to cover the cost of your mortgage in the event of death or severe illness is available from most lenders.

Moving Costs:

Your moving costs will vary depending on whether you rent a truck and move your belongings yourself, or if your hire professional movers. If you hire movers, you can expect to pay a minimum of $1,000 depending on the weight of your belongings, travel distance, and even your moving date.

You can reduce your moving costs if you rent a truck, and kindly ask your friends and family to lend you a hand on moving day!

Utility Bills

When you set up your utilities, you will be charged a deposit to hook up services and replace the previous owner’s name with your name on the bill.

  • Property taxes
  • Mortgage insurance
  • Maintenance fees (for condos)
  • Repairs (the roof for homeowners)
  • Landscaping and lawn care
  • Routine and general maintenance

Many potential homeowners overlook these additional costs, and they can quickly add up. So it’s important to include these costs when considering how much mortgage you can afford.

Key Takeaways from How Much Mortgage Can I Afford?

  • Know how much mortgage you can afford. Remember, this is different than how much mortgage you can get!
  • Overspending on your housing needs will mean you’ll have very little over after you pay your mortgage. And, this means you’ll have little room for other monthly expenses. This can create financial insecurity and stress.
  • Remember to add in other costs that are associated with buying a home. Before you know it, all of these costs can add up. So be sure to budget for the additional home buying expenses. 
  • When you have a mortgage that’s within your financial means, you’ll have peace of mind knowing that you can afford other expenses (especially unexpected expenses).

It’s important to manage all of the costs involved when buying a home. And, knowing how much mortgage you can afford can help you to make the best financial decision for you and your family.

Check out our financial first steps resource page for resources and information to help you achieve your financial goals in Canada!