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Finding a place to live in Canada: A guide for international medical graduates

If you're an international medical graduate moving to Canada to practise medicine, then you already know there's a lot on your plate. Once you've done all the legwork to update your credentials and find a job, you'll need to find a place to live.

Navigating another country’s housing system can be challenging for newcomers, whether they are intending to buy a home or rent one. To make the process easier, here's a guide on how to find a place to live in Canada.

The cost of housing in Canada

Home prices in Canada fluctuate with the real estate market, and can vary wildly depending on the location. For instance, Toronto and Vancouver are both large urban centres and tend to be the most expensive places to live in the country. 

You can find lower home prices if you locate in the Prairie provinces (Manitoba or Saskatchewan) or Atlantic Canada (New Brunswick, Nova Scotia, Prince Edward Island or Newfoundland). In Saskatchewan, for example, the average home sale price was $334,100, while the province of Newfoundland and Labrador saw an average selling price of $286,000, according to CREA data for August 2022.

When it comes to renting, as with buying a home, Toronto and Vancouver are the most expensive cities. A one-bedroom in Toronto averaged $2,329 per month and a one-bedroom in Vancouver averaged $2,574 per month according to Rentals.ca research. Prices again are lower in the Prairies, with the average rent in Lloydminster, Alberta coming in at $827 and Saskatoon, Saskatchewan averaging $988.

Should you buy or rent?

Whether to rent or buy is an age-old question. And like many Canadians, international medical graduates are making this decision in difficult economic times. The “right" answer depends on your lifestyle and financial circumstances, but here are a few considerations.

Renting is usually cheaper than making mortgage payments, but it’s not always the case. Since monthly rents have been climbing, especially in urban areas, buying might make sense if you want to put down roots and have the financial means to do so. On the other hand, the costs of owning a home go beyond just the mortgage payments. You also have to consider property tax and the cost of upkeep. You can do your own calculations with our rent or buy calculator.

You should consider how long you plan to stay in a city or town before making a decision to buy. Ideally, you'd want to stay long enough in your new home to recoup the transactional costs of buying and selling.

Another key question is whether it's a buyer's or a seller's market. During the

COVID-19 pandemic, the Canadian real estate market was red hot — even in rural areas. Often, a seller could put their house on the market and watch a bidding war erupt.

Recently, however, the Canadian real estate market has been cooling, largely due to rising interest rates. As home prices drop and the bidding wars subside, buyers might find navigating the home-buying process easier. But while selling prices have dipped, interest rates have increased significantly, making it more difficult for many prospective homeowners to qualify for a mortgage or afford the kind of home they want.

READ MORE: Should I rent or buy a home?

What to know about renting

Depending on where you live, there can be stiff competition for rentals. And as an international medical graduate, you may encounter some unique challenges when looking to rent housing.

For starters, you are typically required to fill out a rental application and have your credit score checked. Since Canadian credit bureaus don't collect information from international sources, you might have to start from scratch and build a credit score in Canada. In instances where a landlord requires a credit score and you don't have one, they might instead ask for a guarantor to sign the lease; by signing, your guarantor agrees to pay your rent if you fail to.

Alternatively, you could offer to pay a larger deposit if you have no credit rating and you can't find a guarantor to help you secure a rental.

Each province has different rules around deposits. For example, in British Columbia, the maximum deposit a landlord can ask for is half of a month's rent, whereas in Newfoundland and Labrador it's three-quarters of a month's rent.1 A landlord cannot legally ask you to pay a larger deposit than provincial rules allow, but you are free to make this offer if you think it will help secure a rental.

Just keep an eye out for rental scams. Never pay a deposit without meeting the landlord and seeing the house or apartment first.

Before you sign a lease, a landlord will also likely want to see proof of income to ensure you'll be able to cover the monthly rent. Reference letters will also help your application.

While a landlord owns the property, there are rules of conduct they must follow. For example, they can't ever ask you to leave without providing notice and proper documentation that they are ending the tenancy for approved reasons (e.g., they want to move into the property themselves). It's a good idea to read provincial tenancy rules once you decide where to settle, and consult a landlord/tenant board or tenant advocacy group if you have questions or concerns.

TIP: Searching for a rental? MedsHousing.com is a platform designed to make the housing search easier for people doing their medical training. Short- and long-term housing listed on this website is located close to hospitals and clinics, medical school campuses, rural placements and more.

What to know about buying

If you do plan to stay in one location for the long haul and if you think you can afford it, buying might be the right choice for you. However, it's important to research all the costs and necessary qualifications beforehand.

Qualifying for a mortgage

To get a mortgage, you’ll need to approach a mortgage lender (like your bank or credit union) or a mortgage broker. They will want to review your personal financial information, including your credit history, and your income, debts and assets.

Before you start shopping for a mortgage, assess your financial situation yourself. Lenders will want to see that your total debt load is not more than 44% of your income.2 Total debt load includes mortgage debt plus credit card balances, car loans, lines of credit and student loans.

Also make sure you have a good credit score. This is a prerequisite to getting a mortgage. Depending on the lender, you may be able to get a mortgage with a lower score, but you'll likely be charged a higher interest rate. This is why it's important to start building credit as soon as you get to Canada.

In Canada, it's recommended to get mortgage pre-approval before you make an offer on a home. This way, you’ll know how large a mortgage you're eligible for and what the estimated monthly payments would be. Either a mortgage lender or a mortgage broker can do this.

When it’s time to make an offer on a home, you'll want to consider including a financing condition in your written offer. This protects you by making your offer conditional on you actually getting a mortgage from your lender for the home.

READ MORE: How to finance your first home purchase

The hidden costs of buying a home

When calculating whether you can afford to buy, you need to also factor in the hidden costs of buying a home. Below are rough estimates of some of these so-called “closing costs."

Closing cost

What is it?

Estimated cost

Home inspection (optional)

An assessment of the property's condition before your offer to buy it is finalized. Usually done by a professional home inspector, it can tell you if there are any damaged, defective or unsafe components of the home. If you include a home inspection as a condition of your offer, it gives you the flexibility to back out of the deal if you find problems that you can't afford to fix.

Up to $1,000

Land survey (optional)

So that there's no dispute around property boundaries, you can pay for an up-to-date land survey. What happens is a survey will measure the land you plan to purchase and confirm where the boundary lines exist.

Varies

Appraisal fee

Your mortgage lender may want an appraisal to ensure the market value of your new home is correct.

$275 to $500

Legal fees

You'll need a real-estate lawyer to prepare your home purchase documents and conduct a title search.

$900 to $2,000

Land transfer tax

Land transfer tax is a provincial tax on real estate purchases that is paid by the buyer. It's calculated as a percentage of the cost of your home and varies by province and municipality. In some locations, first-time home buyers are eligible for a rebate.

Varies

Mortgage default insurance

Often called “CMHC insurance," this is insurance that you must pay if you're buying a home with less than a 20% down payment.

2.8% to 4% of the mortgage value

GST/HST (new homes)

If you're buying or building a new home, you'll have to pay GST/HST on top of the purchase price.

Federal GST (5%) + PST (% varies by province)

Financial incentive programs

Relocating is expensive, but there are various federal and provincial/territorial programs that can help with costs as you start your medical career in Canada.

In areas where there are doctor shortages, governments have been offering return-of-service agreements or grants to new graduates or internationally trained doctors to help alleviate some of their expenses. A physician will typically have to agree to live in that area for one to three years to receive that financial offer.

Get help with the financial side of things 

If you have questions about developing a solid financial plan that will help get you through starting a medical career in Canada, an MD Advisor* is always available to help.

When you’re ready to buy a home, Scotiabank allows early-career physicians (residents, fellows and physicians in their first two years of practice) to qualify for a mortgage based on their projected future income, rather than their current income. Learn more about Scotiabank’s home-financing opportunities for physicians.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.

1 Source: https://www.rentalsfornewcomers.com/blog/renting-without-a-credit-history

2 Source: https://www.canada.ca/en/financial-consumer-agency/services/mortgages/preparing-mortgage.html