I have something to ask regarding resident mortgages for non-Canadians. I got an approximate idea of interest rate from here http://www.albertamortgagecentre.com/edmonton-mortgage-rates/. I think the interest rates for Canadians and Non-Canadians are not same.
In the case of a Non-Canadian, what are the factors which decide the interest rate? How will they calculate the down payment he has to pay? If anybody of you has any idea about this, please share the details. Thank you.
Sat Apr 08, 2017 6:11 am
oldguy Senior Member
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quote: In the case of a Non-Canadian, what are the factors which decide the interest rate? How will they calculate the down payment he has to pay?
I don't have any specifics to offer to you - but "risk analysis" is the key factor for any loan underwriter.
First, the borrowers general credit rating. Ability to repay.
Then - Inclination to repay - a foreign borrower always has a lower inclination to repay. Eg, if your primary residence is in Sweden and you are borrowing to buy a vacation house in Edmonton, the lender assumes that, if you go into financial failure, you will keep (protect) your home in Sweden and let the Edmonton house go into foreclosure (almost any of us would make that choice).
The underwrite assesses the total risk - and then determines the rate and down payment that s/he is willing to take. And his local market is a factor - if s/he has a waiting list of qualified local borrowers that will utilize all of the available money-to-lend, then why take risk on a foreign borrower. And conversely, if the lender has a shortage of borrowers (excess money to lend) s/he will offer a more attractive deal to a foreign lender - supply & demand.
