Non Resident Mortgage Information ...

Generally, Banks outside Canada are unable to lend money on Canadian properties. Canadian Institutions however are willing to finance non-residents with minimum downpayments usually amounting to approximately 35% of the purchase price. Canadian financial institutions differ from other international lenders. Typically mortgages in Canada are term mortgages or alternatively balloon mortgages wherein the mortgage is set for a term and then must be refinanced/renewed at the end of the term. Unlike an American financed mortgage, a Canadian mortgage is typically amortized over 25 years.

Down Payment: The minimum down payment required is 35% to 50% of the purchase price or appraised value, whichever is lower.

Term: This is the length of time for which the interest rate is set (this also applies to variable rate mortgages). Generally terms are available from 1 to 10 years. At the end of the term the balance may be renewed for a further term of your choice, at the then current interest rate. This process continues until the mortgage is paid in full.

During the term, the mortgages generally allow for prepayment on the annual anniversary date of 10-20% of the principle plus an additonal 10-20% increase of the principal and interest payment monthly. Other than this the mortgages are closed and will incur a penalty if prepaid. There is no penalty if you pay part or all of the mortgage amount outstanding at the end the term.

If you sell your property during the term, you will incur penalty interest unless you transfer the mortgage to another property you purchase or own, or you have purchaser assume the mortgage.

Currency: The transaction must be completed in Canadian funds.

Banking: For convenience in making payments, a Canadian Bank account is essential and can be either with the mortgage institution or another Banking facility in Canada

Income Tax Implications: While not within our area of expertise we can readily put you in touch with the appropriate professional advisors or we ask that you seek advise from your professional in your country of origin.