Ultimate Guide for Canadian Citizens to Get U.S. Mortgages

Amresh Singh, CEO - HomeAbroad  by Amresh Singh
11 min read
US mortgages for Canadian citizens

It’s no secret that American mortgage rates are some of the lowest. But before you make the jump, it’s essential to understand how the American mortgage system works. The mortgage system in the U.S. is not as different as it is in Canada, although some minor differences are present between both systems. American mortgages also provide various benefits that help potential buyers with their property in the U.S. in the long run. This also proves beneficial when one is planning on selling their U.S. property.

This guide will teach you everything you need to know about American mortgages, from how to get approved to what kind of interest rates you can expect. So whether you’re a first-time homebuyer or simply curious about American mortgages, this guide has everything you need!

Is It Possible for Canadian Citizens to Obtain a Mortgage in the U.S.?

Yes, Canadians can obtain a mortgage in the United States. Many Canadians take advantage of the lower interest rates and longer loan terms available in the United States to purchase vacation homes or investment properties. According to the National Association of Realtors (NAR), in 2020-2021, Canada was one of the top five foreign purchasers in terms of dollar volume, with citizens purchasing property in the U.S. worth $4.2 billion.

U.S mortgages for Canadian citizens

Many Canadians are purchasing U.S. real estate on a personal basis. Some work in the United States and do not want to rent their home. Others own businesses in the United States and travel there frequently. Others buy property in the United States for investment purposes and choose to let them out for additional money. Furthermore, many Canadians own real estate in the United States as vacation property or snowbirds.b

How to Qualify for a U.S. Mortgage As a Canadian Citizen?

There are a lot of questions that come to mind when applying for a cross-border mortgage. To be eligible, applicants must complete a basic mortgage application and submit all required documents regarding their income, credit report, assets, and liabilities. The typical criteria include good Canadian credit history and proof of earnings in Canada and the United States.

Although, a citizen of Canada doesn’t need to show their U.S. credit history as well. They can apply for a mortgage with a minimum to no U.S. credit history. The lender will decide on a pre-approval a few days after the application has been submitted and all necessary documents have been provided. Following the acceptance of a purchase offer, it will take at least 30 days for the mortgage to be processed.

The Process of Obtaining a U.S. Mortgage as Canadians

Purchasing an investment property overseas is in itself a daunting task. This is especially when you are unfamiliar with the home buying process in that country. Understanding how the U.S. real estate industry works is necessary and how it differs from your home country. It is vital to educate oneself on the various documents required, the criteria to be met, and the overall process, including mortgage rates, closing costs, and others, of buying a home in the U.S.

The following are the stages in buying a house in the United States. You can refer to our extensive blog on how foreigners buy property in the U.S. for a more detailed explanation of the below-mentioned points.

1. Decide where you want to buy your house and consult a CIPS real estate agent.

2. Understand your cross-border tax situation.

3. Make an offer on the home you like and seal your ideal property in the United States.

4. Take ownership of your new dream home after obtaining home financing for foreign nationals.

What is a U.S. Mortgage, and How Does It Differ from a Canadian Mortgage?

A mortgage is a loan that allows you to purchase a property. The property is then used as collateral for the loan. Banks and other lending institutions typically offer mortgages. There are two main types of mortgage loans: fixed-rate and variable-rate.

With a fixed-rate mortgage, the interest rate remains the same for the loan duration. This means that your monthly payments will also remain the same. On the other hand, a variable-rate mortgage has an interest rate that can fluctuate over time. Your monthly payments can go up or down depending on market conditions.

Mortgages are typically for a term of 15 or 30 years. This means that you will make monthly payments for the loan duration, after which the loan will be paid off in full. Mortgages are a long-term financial commitment, so comparing rates and other aspects is highly advised before selecting.

When it comes to obtaining a mortgage in the United States, Canadians will discover that there are several distinctions when they apply in Canada. Here are the differences between US and Canadian mortgages.

Mortgage AspectsIN CANADAIN USA
Loan approval lengths5-10 working days30-45 working days
Application requirementsProof of income
Type of property to be purchased
Proof of 2 years of employment
Proof of income
Type of property to be purchased
2 years of employment history
Proof of country of origin
DocumentationNo-doc/Low-doc mortgageTax returns, bank statements, additional investments, insurance papers
Credit history requirementsSlightly higher (600-680)620 but can be reduced to 500
Mortgage interest ratesNondeductibleDeductible from taxable income
Down payment20% for conventional mortgages, 5% for a low down payment mortgage20% down payment, 25% for investment properties
Closing costs2.5-3%1-3%

1. Mortgage loan approval lengths

In Canada, the average processing time for a mortgage is 5-10 working days. On the other hand, in the United States, it takes an average of 30-45 working days until your loan is approved.

1. Income

2. Assets

3. Type of property purchased

4. Proof of 2 years of employment

In the U.S., the following need to be prepared when applying for a mortgage, along with proof of income, assets or liabilities, type of property you want to purchase and proof of any other real estate that you own, and proof of 2 years of employment, you will also need to provide proof for your country of origin.

2. The Documentation Needed for a Loan

In most cases, the documentation needed for a U.S. mortgage is more than that required for a Canadian mortgage owing to the varied legal demands. In the latter case, minimal necessary paperwork includes a purchase and sale agreement verifies down payment confirmation of income and any other supporting documents. In the United States, applicants must submit their tax returns, bank statements, additional investments, insurance papers, existing mortgage and property statements, and what is necessary for Canadian mortgages.

The biggest difference between Canadian and U.S. mortgages is the amount of documentation required. In the United States, a mortgage loan application typically requires full documentation of the borrower’s income and employment history and asset and liability information. In Canada, however, a “no-doc” or “low-doc” mortgage may be available, which requires less documentation.

3. Credit History Requirements

As of 2022, the minimum credit score requirement for foreign nationals is around 620 but can be reduced to 500 through government-backed loans, whereas Canada’s is slightly higher (600-680). Although producing your Canadian credit history/score when applying for a U.S. mortgage loan will not help, it is possible to apply for a U.S. mortgage loan without having any U.S. credit history.

4. Mortgage Interest Rates

Mortgage interest is not deductible in Canada, whereas it is deductible from taxable income in the United States. Fixed-rate mortgages are compounded monthly in the United States but can be compounded semi-annually in Canada. ARM loans with terms ranging from three to seven years and interest rates typically locked for the first term before adjusting according to the market each year are accessible.

Mortgage interest rates are presently higher in the United States than in Canada. Monthly mortgage interest is applied in the United States, whereas semi-annual compounding benefits Canadians more than Americans. Although Canadians save money on interest, they will pay far more for breaking their mortgage early in the term, which is common in the U.S. In the United States, mortgages are more expensive to set up but have become increasingly flexible.

In the United States and Canada, you may refinance your mortgage to extract an equity line of credit from your property or benefit if interest rates go down. If you refinance your mortgage in Canada, you will have to pay the penalty to get out of your previous one. In the United States, you will not be charged to leave your current mortgage, but you will have to pay closing fees again to establish a new one.

5. Downpayment

US mortgages require a 20% down payment for a property in the U.S. you are to inhabit either year-round or part-time and 25% for investment properties. The down payment in the Canadian mortgage process is 20% for a conventional mortgage and 5% for a low down payment mortgage where mortgage insurance is required.

6. Closing costs

Another important distinction to recognize is the closing cost, which ranges from 2.5% to 3% of the purchase price in Canada and is primarily determined by land transfer taxes, legal fees, and disbursements. In the United States, closing costs are usually greater, including State taxes, title insurance, and a 1% – 3% origination fee. The interest-free period applies only to the original amount, not to any accrued or outstanding interest, making it a particularly appealing choice for Canadians should the U.S. dollar weaken dramatically against the Canadian dollar.

Other Significant Dissimilarities Between the U.S. and Canada Mortgage

In Canada, shorter amortization periods are decided during the amortization period, lasting from 6 months to 10 years. A new term length and interest rate are set at the end of the term. This implies that the longer the term is, the higher the interest rate. In contrast to America, there is no requirement to renegotiate your mortgage while still active. The mortgage is entirely paid off after the term ends if all payments have been made on time.

In Canada, variable-rate mortgages allow you to make pre-payments in the contract, depending on whether your loan is open or closed-rate. An open rate no-documentation mortgage allows you to pay off your penalty-free loan at any time, but interest rates are generally higher. Prepaying a fast rate mortgage outside of the authorized pre-payment windows incurs penalties. For example, you may be able to raise your payments by up to 10% each year without consequence. In the United States, some mortgages enable you to pay off the principal in full or make additional payments at any time without paying the penalty.

In Canada, you can switch to a different type of mortgage without reapplying if you qualify, but there may be costs. Most U.S. lenders will require you to reapply and go through the application procedure again if you want to change from a fixed-rate mortgage to another form of a loan with the same lender (such as an adjustable-rate to a traditional).

How Much Money Can Canadians Borrow from US Mortgages?

The down payment for a U.S. property will generally be greater than what you would have required as a down payment for your primary residence in Canada unless you’re taking out a mortgage on your main home. The amount one can borrow will differ based on the intended use of the property in the United States.

For a Canadian buying property in U.S or investing in American real estate as a vacation home, they will likely be limited to borrowing 60 to 70 percent of the property’s appraised value. The same is true if the American home being purchased will be used as an investment or rental property.

For Canadians looking to purchase a second home in the United States that they intend to live in part-time, it may be possible to borrow up to 80 percent of the property’s appraised value in certain cases.

The maximum loan-to-value (LTV) ratio for American properties financed through a Canadian mortgage lender is 85 percent. This means that you would have to come up with at least a 15 percent down payment on your own to finance a property in the United States.

You may be able to put down less than 15 percent, but you’ll likely have to pay for private mortgage insurance (PMI) if your LTV ratio is higher than 80 percent. American lenders are also more likely to require a higher credit score for borrowers taking out a cross-border mortgage.

For Canadians looking to purchase American property, it’s important to be aware of the different lending requirements between the two countries. It’s also essential to consult with a qualified Canadian mortgage broker or agent who has experience helping clients secure financing for U.S. real estate purchases.

FHA Mortgages for Canadian citizens

FHA loans are secured by the Federal Housing Administration, one of the most popular loans considered by first-time homebuyers in the U.S. The main advantage of applying for an FHA loan is that it requires low credit scores and downpayment compared to other conventional loans. Applicants must provide proof of their employment history for the past two years, along with federal tax returns and bank statements.

Once you have your application documents ready, it’s time to apply for the FHA loan. There are a few steps to be followed in this procedure:

1. Estimate budget

2. Arrange documents

3. Compare offers from multiple lenders

Best Lenders to Consider for Canadians Buying Property in the U.S.

One of the most important things to do while house hunting in the U.S. is to find a lender who will understand your needs and situation. While some lenders hassle potential buyers into more paperwork, lenders who will lend to Canadian citizens, specifically, will be able to guide them and provide help as needed. The majority of banks and other financial institutions in the United States are willing to lend to Canadian citizens. Still, it is best to look for those that operate in Canada or Canadian banks with U.S. subsidiaries. The essential advantage of working with Canadian-affiliated lenders is that you get better mortgage rates and the time to get your loan approved is much faster.

US Mortgages with no US credit history

US Mortgages for Canadian Citizens

Get pre-qualified for a US Mortgage as a foreign national buyer without US credit history.

Tips for Completing a U.S. mortgage as a Canadian citizen

If you’re a Canadian citizen looking to get a mortgage in the United States, here are a few tips to help you successfully complete the process:

1. Make sure you have a valid passport and can prove that you have a steady income and good credit history.

2. Make sure you work with a professional who can walk you through the procedure. The method for obtaining a mortgage in the United States differs from that in Canada, so it’s critical to have someone who knows what they are doing assisting you. Working with a CIPS agent will help you in this process as they are thoroughly trained to cater to your needs and wants.

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

3. Gather all of the necessary documentation before you start the process. This will make it easier for your lender to assess your application.

4. Be prepared to answer questions about your finances and why you’re looking to get a mortgage in the United States. Lenders will want to know this information to ensure you’re a good candidate for a loan.


Purchasing property overseas can seem like a complex process, but with the proper knowledge and understanding of the topic, the process will be as fun as decorating your new home in the U.S.!

This guide aims to share knowledge on how mortgages differ in the U.S. and Canada so that it is easier for Canadian citizens to know and compare the two processes and how knowing specific tips and tricks will enhance their house-hunting process and make it worthwhile!

Frequently asked questions (FAQs)

Can Canadian citizens get a U.S. mortgage?

A Canadian citizen can apply for a mortgage in the United States and buy a property under their name. Although the mortgage requirements and the procedures are a bit different in both countries, this guide will help you understand them to help you navigate your home buying process in the USA better!

Can a Canadian own a rental property in the U.S.?

As a non-resident of the United States, there are no restrictions against owning property in the U.S. There are no restrictions for any foreign national to own a property in the USA. Therefore, Canadians can very well hold rental property, given that they are subject to a withholding tax of 30% of the gross rental income.

How long can I stay in the U.S. as a Canadian?

Canadian snowbirds can keep up to six months in the USA, at the time of entry, in any 12 months. However, there are some exceptions to this rule. For example, if you are employed in the U.S., you may be able to stay for a more extended period. Additionally, if you are enrolled in a full-time educational program in the U.S., you may also be able to stay for a more extended period.

Do Canadians have to pay taxes on their U.S. real estate?

Canadians will be required to pay their property tax like any other U.S. citizen. Furthermore, if they make a profit from a rental property in the United States or sell U.S. real estate for a profit, Canadians will be subject to additional taxes.

Amresh Singh, CEO - HomeAbroad
About the author:
Amresh Singh is the founder & CEO of HomeAbroad and has an extensive 12+ years of experience in the financial services and mortgage industry - building business development and product strategy and leading customer strategy in the financial services industry domain.
Prior to co-founding HomeAbroad, Amresh has worked for one of read more...
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