Work permit or new PR: what lenders accept

The first thing to know is that “no Canadian credit history” and “bad credit” are different problems with different solutions. The second is that a work permit is not a wall. Several lenders and both mortgage insurers run newcomer programs, and the rules are specific enough that the right file goes through and the wrong presentation of the same file does not.

Who qualifies as a newcomer

Most programs define a newcomer as someone who arrived in Canada within the last five years and holds permanent residency or a valid work permit. Some require a minimum time remaining on the permit. Citizens who arrived recently often qualify too. The exact conditions differ by insurer and lender, and they change, so we confirm them for your file rather than quoting a rule that may be a year old.

What replaces a credit history

A Canadian credit report with less than a year of history does not give a lender much. The programs allow alternatives:

• An international credit report from your home country, where one exists.
• A letter of reference from your previous bank.
• Twelve months of on-time payments for rent, utilities, phone or insurance, documented with statements.

Start collecting these before you apply. Paying rent by e-transfer from a Canadian account, with the landlord’s name in the memo, makes the record easy to prove.

Income

Lenders want Canadian employment income: an employment letter and pay stubs, usually with probation completed. Some accept a signed offer for a job starting soon in your field. Self-employment income earned abroad is hard to use; self-employment in Canada follows the usual two-year rule, with some flexibility if you did the same work at home.

The down payment

The minimums are the same as for anyone else, starting at 5% under an insured program. Money from abroad is fine if the paper trail is complete: the source account, the transfer, the arrival in your Canadian account. Lenders and insurers are required to trace it, and the single most common delay we see on newcomer files is an incomplete trail. Keep every document.

Status changes mid-process

If your PR is granted or your permit is renewed while the application is in progress, tell us immediately. It usually helps.

In Spanish, if you prefer

Cristina and Juan both work in Spanish. The lender’s documents are in English; the explanations do not have to be. Hablemos en español, or book a conversation.