Homeownership in Canada today: A guide for newcomers

Newcomers to Canada often choose to rent a place before investing in their own home. The benefits of renting are that you face few upfront costs, you avoid any housing cost fluctuations, and you can take the time to assess and find the best home for you. Learn more about renting versus buying 

Timing your home purchase is also an important consideration; but if you have found the town or city you want to live in and are considering the commitment of purchasing a home, fluctuations in the housing market could matter less in the long term. Historically, the Canadian housing market has been stable and strong, allowing homeowners to build equity over the long-term. What does this mean? As the value of your home increases over time, that rate of increase is often greater than the interest rate on your mortgage. The resulting difference is a return for you.

With physical distancing measures in place, homebuyers have increasingly turned to virtual tours to see properties. This may continue to be a trend even as the economy reopens and on-site visits resume. According to the Canadian Real Estate Association (CREA), the number of newly listed homes climbed by 49.5% in June as compared to MayOpens a new window in your browser.. 

Additionally, the Bank of Canada has kept interest rates low and may continue this trend for the foreseeable futureOpens a new window in your browser.. What does this mean for aspiring and current homeowners? It allows first-time homebuyers to take advantage of historically low mortgage rates or provides existing homeowners an option to refinance their mortgage at a lower rate.

Whether you’re a first time home buyer or have purchased a property before, buying a home is a major decision in your life. Here are a few tips to help you plan and prepare for your big purchase:

Location, location, location

Proximity to work or school is an important consideration when you are choosing your home. Also look at distance to amenities and access to public transportation. 

A growing home

Consider the size of your home to ensure it will accommodate your current and future family needs. Think about whether you’ll need room for a growing family or relatives coming to visit or stay. Review a checklist of suggested criteria

Explore your options

It’s best to explore mortgage options before putting an offer in on a property. A CIBC Mortgage Advisor can help you understand your choices. Request a call from a mobile mortgage advisorOpens a new window in your browser.

Get what you need

Gather essential documents you’ll need for your mortgage application. Here’s a checklist of required mortgage documents (PDF, 70 KB) Opens a new window in your browser..

Remember, as a newcomer, your financial institution may require additional documents to verify your past employment and education, especially if you don’t have an established credit history in Canada.

Find the funds for a down payment

There’s different sources you can dip into for your down payment. For example, you could take advantage of the Home Buyer’s PlanOpens a new window in your browser.. It lets you withdraw up to $35,000 per person from your (RRSP). 

If you plan to use a gift, you need a signed document from the giver for non-repayment and you’ll need to secure a transfer of funds statement as proof.  

Don’t forget closing costs

Remember to set aside extra funds for the closing costs. You should expect to spend between 1.5% and 4% of your home’s purchase price on costs such as legal fees, taxes and mortgage default insuranceOpens a new window in your browser..

If you’re a newcomer settling in Canada and you have the down payment for a home, but you don’t have the necessary Canadian credit history or employment income, you may be eligible for a mortgage through the CIBC Newcomer to Canada PLUS mortgage programOpens a new window in your browser.. A CIBC Mortgage Advisor can help you navigate this along with many other details related to buying a home in Canada. Request a call from a mobile mortgage advisorOpens a new window in your browser.