NON-RESIDENT INFORMATION

For those purchasers who are not residents of Canada the following information may be useful:

Generally, Banks outside Canada are unable to lend money on Canadian properties. If you want to finance your purchase in your home country, you will have to use assets other than the Canadian property. For this reason, most purchasers use the Canadian Financial Institutions to finance up to 65% of the purchase price. The option is open to the non-resident to borrow at home for the remaining 35%.

Down Payment: The minimum down payment required is 35% of the purchase price or appraised value, whichever the lesser. The balance of 65% of the price may be financed by a Canadian Financial Institution.

Amortization: This is the length of time over which the payments are spread. The normal amortization period is 25 years, however shorter amortization periods are available.

Term: This is the length of time for which the interest rate is fixed. Generally terms are available from 1 to 5 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 mortgage generally allows for prepayment on the annual anniversary date of 10-20% of the principal. Other than this, the mortgages are closed and will incur a penalty if prepaid. The amount of the penalty varies, but as a general rule, is equal to 3 months interest or interest rate differential, whichever is greater. 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 the purchaser assume the mortgage.

Currency: The transaction must be completed in Canadian funds.

Banking: 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. Generally the income tax implications are easy to understand and are minimized by the tax treaties between the two countries.