What to Know About Non-Resident Mortgages in British Columbia
What to Know About Non-Resident Mortgages in British Columbia
British Columbia is a great place to buy property because of its stunning landscapes and relaxed residency requirements.
British Columbia is a great place to buy property because of its stunning landscapes and relaxed residency requirements. The cities in BC are beautiful and well-maintained, while the countryside is lush and green. This makes BC an attractive real estate market, even during the COVID pandemic when the market has seen some downsizing. All these factors combined make it an ideal place for people who do not have Canadian citizenship to invest in real estate.
Real Estate Costs in Vancouver, BC
In recent years, Metro Vancouver has become more like cities like Hong Kong, Singapore, London, and Sydney in terms of the cost of housing. This is mainly due to a large number of immigrants moving to Metro Vancouver, as well as people from other countries investing in the area. These factors have increased demand for housing in Metro Vancouver, driving the prices to levels. For those unable to pay in cash, various mortgage options are available to non-residents, allowing them to purchase a home with a loan.
Who Is Considered a Non-Resident?
Anyone who doesn't live in Canada for most of the year and is only present in the country for a short period is considered a non-resident. This includes those who haven't been in Canada for more than 183 days in a given tax year.
If you're a non-resident looking to buy a property in Canada and paying in cash, you'll need to give a down payment of five to ten percent of the property's purchase price. This deposit must be made within 24 hours and can be done by providing a bank draft, money order, or certified cheque from a Canadian Bank.
If you're a non-resident looking for a mortgage in Canada, you'll need to understand the different types, the criteria you must meet, and the steps to take when applying. Various lenders offer loans with costs associated with securing a home loan as a foreigner.
Getting a Mortgage As a Non-Resident Or a Non-Permanent Resident
Canadians living outside the country for more than six months are considered non-residents by Canadian banks and are subject to the 15 percent non-resident speculation tax, which also applies to foreign citizens.
Suppose you are a foreign individual seeking to purchase a residence in Canada with a local permanent resident. In that case, banks will still consider you a non-resident and impose the same lending criteria for a mortgage loan, including a larger down payment than a Canadian citizen.
Non-Resident Mortgage Taxes And Rates
When buying property in Canada, you should know the taxes involved. Apart from the non-resident speculation tax, once the ownership of the property is transferred to you, you will be responsible for paying land transfer taxes and yearly property taxes. The amount of these taxes will vary according to the size of the residential property, so you can use the British Columbia property tax calculator to get an accurate estimation.
For most lenders, non-residents seeking a mortgage loan in Canada must put down a minimum of 35 percent of the purchase price. Fortunately, they can receive the same interest rates as Canadians, provided they meet the eligibility requirements.
Lenders now require more information from prospective buyers to determine if they can handle the responsibility of a mortgage. Every bank will have its own criteria for approving a loan; some may be more lenient, while others may demand a larger down payment depending on where you live.
Bottom Line
Obtaining a mortgage in British Columbia as a non-resident can be complicated. It is important to understand the province's laws, regulations and requirements, as well as the mortgage options available. Non-residents may have to make a larger down payment and must be prepared to provide additional documentation. With the right information, non-residents can successfully obtain a mortgage with a good rate in British Columbia.
If you need mortgage financing in Vancouver, BC, Level Up Mortgages is here to help! We simplify the mortgage journey for new buyers, newcomers and the self-employed. If you don’t know where to start or what to do next and want to speak with someone–call us and get your questions answered!
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.