Canadian Real Estate Financing: A Practical Guide

Published on September 30, 2025 and written by Cyril Jarnias

The Canadian real estate market is attracting more and more foreign investors seeking profitable opportunities and stability. Whether you want to acquire a secondary residence or diversify your investment portfolio, Canada offers numerous possibilities. However, obtaining real estate financing as a foreigner can seem complex. In this article, we will guide you through the key steps to realize your real estate project in Canada.

The Canadian Dream Within Reach: Can Foreigners Really Get a Mortgage?

The good news is yes, foreigners can obtain real estate financing in Canada! Although the process may be slightly different from that for Canadian residents, it is not impossible for a non-resident to get a mortgage. Canadian banks and financial institutions are generally open to applications from foreign investors, recognizing the potential and stability of the Canadian real estate market.

However, it’s important to note that conditions may vary depending on your status and financial situation. Lenders assess each case individually, taking into account factors such as your country of origin, income, credit history, and the type of property you wish to acquire.

Here are some key points to remember:

• Non-residents can typically borrow up to 65-75% of the property value, compared to 80-95% for Canadian residents.
• Interest rates may be slightly higher for foreign borrowers.
• Some banks may require a larger down payment or additional guarantees.
• It’s often easier to obtain financing for residential property than for commercial property.

Expert Tip: Consider working with a mortgage broker specializing in loans for non-residents. Their expertise can help you navigate the process and find the best financing options suited to your situation.

The Winning Application: What Documents to Prepare for Your Loan Request?

To increase your chances of obtaining real estate financing in Canada as a foreigner, it’s crucial to prepare a strong and complete application. Canadian lenders will pay particular attention to your ability to repay the loan, even if you don’t reside in the country.

Here is the list of essential documents to gather:

• Valid identification (passport)
• Proof of income (tax returns, bank statements, employment contracts)
• Bank statements from the last 3 to 6 months
• Credit history in your country of origin
• Proof of funds for the down payment (investment statements, bank statements)
• Letter of recommendation from your current bank
• Details on existing assets and liabilities
• Information about the property you wish to purchase

Additional documents for self-employed individuals:

• Financial statements from the last 2 to 3 years
• Business income tax returns
• Professional or business licenses

Practical Tip: All documents must be translated into English or French by a certified translator. Allow sufficient time to gather and translate these documents before starting the loan application process.

Keys to Success: What Conditions Must You Meet to Secure Your Financing?

Obtaining real estate financing in Canada as a foreigner requires meeting certain specific conditions. Lenders seek to minimize risks associated with non-resident borrowers, which results in sometimes stricter requirements.

Here are the main conditions to satisfy:

• Substantial down payment: Be prepared to make a down payment of at least 25% to 35% of the property value. This higher requirement than for Canadian residents aims to reduce the lender’s risk.
• Stable and high income: You’ll need to demonstrate sufficient and stable income in your country of origin to cover mortgage payments and other property-related expenses.
• Excellent credit history: A spotless credit history in your country of origin is crucial. Some lenders may require a minimum credit score.
• Financial reserves: You’ll need to prove that you have sufficient financial reserves to cover several months of mortgage payments.
• Mortgage insurance: In some cases, you might be required to obtain mortgage insurance, which can increase the overall cost of the loan.
• Tax compliance: Ensure you’re compliant with tax obligations in your country of origin and in Canada.

Strategies to strengthen your application:

• Consider opening a Canadian bank account and transferring funds there before applying for a loan.
• If possible, establish a presence in Canada, for example by making regular trips there or already owning assets there.
• Consider the option of working with a Canadian guarantor, if you have that possibility.
• Explore special programs for foreign investors offered by certain financial institutions.

Expert Tip: Don’t hesitate to consult a lawyer specializing in Canadian real estate law to ensure you understand all the legal and tax implications of your investment.

Navigating the Canadian Banking System: Choosing the Right Financial Partner

Choosing the right financial institution can make all the difference in your quest for real estate financing in Canada. Some banks and lenders are more open to foreign investors and offer programs specifically designed to meet their needs.

Here are some options to consider:

• Major Canadian banks: Institutions like RBC, TD Bank, Scotiabank, and CIBC often have departments dedicated to international clients and may offer tailored solutions.
• Specialized lenders: Some lenders focus specifically on foreign investors and may offer more flexible conditions.
• Mortgage brokers: Working with a broker can give you access to a wide range of options and help you navigate the process.
• International banks: If your bank in your country of origin has a presence in Canada, it might facilitate your loan application.

Factors to consider when choosing a lender:

• Interest rates and loan terms
• Flexibility of requirements for non-residents
• Expertise in international transactions
• Quality of customer service and multilingual support
• Speed of the approval process

Practical Tip: Don’t hesitate to compare offers from multiple lenders before making a decision. Each institution may have different criteria and products that might better suit your particular situation.

Beyond Financing: Understanding the Canadian Real Estate Market

Obtaining financing is only part of the equation when it comes to investing in Canadian real estate. To maximize your investment, it’s crucial to understand the particularities of the local market well.

Key points to consider:

• Regional diversity: The Canadian real estate market varies considerably from one region to another. Major cities like Toronto and Vancouver have very different markets from those in small towns or rural areas.
• Local regulations: Each province and territory has its own real estate laws and regulations. For example, some regions have additional taxes for foreign buyers.
• Market trends: Stay informed about current market trends, growth rates, and future projections for the region that interests you.
• Tax considerations: Understand the tax implications of your investment, both in your country of origin and in Canada.

Expert Tip: Consider working with a local real estate agent experienced in international transactions. Their knowledge of the local market and understanding of the specific needs of foreign investors can be invaluable.

Conclusion: Your Passport to Real Estate Investment in Canada

Investing in Canadian real estate as a foreigner may seem intimidating at first, but with proper preparation and the right resources, it’s a completely achievable goal. Canada offers a stable real estate market, potentially attractive returns, and a strong legal framework that makes it a preferred destination for international investors.

Summary of key points:

• Foreigners can obtain real estate financing in Canada, although conditions may be stricter.
• Thorough preparation of your application is essential to increase your chances of success.
• Be prepared to provide a larger down payment and demonstrate strong financial stability.
• Carefully choose your financial partner by comparing offers and expertise in international clients.
• Understand the local real estate market well and the legal and tax implications of your investment.

Final word: Although the process may seem complex, the opportunities offered by the Canadian real estate market are worth it. With patience, careful planning, and the right advice, you can realize your dream of real estate investment in Canada.