Definition
Income earned abroad is treated differently by lenders when calculating qualifying mortgage income.
**General rules**: - Mandatory conversion to CAD at the 2-year average exchange rate (or current rate depending on lender) - Required documentation: Canadian T1 General (if declared in Canada), foreign tax slips, translated and certified employment letter, employment contracts, pay stubs - Some lenders apply a 20-25% haircut on foreign income to account for exchange rate and verification risk
**Residents vs. non-residents**: - Canadian resident with foreign income (e.g., travelling worker): generally accepted with documentation - Non-resident buying in Canada: specialized programs (New Arrivals, Non-Resident) — minimum 35% down payment, no CMHC insurance - Temporary foreign worker (valid work permit): some lenders treat as resident status if sufficient Canadian history
**New Arrivals Programs**: CMHC, Sagen and Canada Guaranty offer programs allowing new immigrants (<5 years in Canada) to qualify with 5% down without full Canadian credit history, subject to income and status conditions.