Exchange rate and spread
The rate you see in the news is the mid-market rate. Your bank converts at a worse rate, and the gap is the spread. On a large transfer, 1.5% at a bank versus a fraction of a percent at an FX broker is several thousand dollars. Lock the rate with a forward contract if closing is weeks away and you want certainty.
Why a 1-cent move matters
On $250,000 CAD, each cent the loonie moves changes your US cash by about $2,500 before fees. With 30% down and 3% closing costs, that is roughly $7,500 of purchase price. The calculator shows the exact figure for your inputs.
Financing as a Canadian
- US lenders that work with Canadians usually ask for 25% to 40% down and rely on Canadian income and credit documents.
- Some Canadian banks have US subsidiaries that lend on Florida property to their existing clients.
- Closing costs are higher with a loan because of lender fees, an appraisal and prepaid escrow for tax and insurance.
Other costs to plan for
- Homeowners insurance in Florida is a large yearly cost, and condos add monthly fees.
- When you sell later, FIRPTA withholding of up to 15% applies to most foreign sellers.
- Rental income and the sale are reported in both the US and Canada. Speak to a cross-border tax accountant before you buy.
Questions
What exchange rate should I enter?
The rate you can actually get, not the headline rate. Ask your bank or FX broker for a quote, or enter the mid-market rate and put their margin in the spread field.
Can Canadians get a mortgage in Florida?
Yes. Several US lenders and US arms of Canadian banks lend to Canadian residents, typically with 25% to 40% down.
