Bad Credit Mortgage
Bad Credit? You Can Still Get a Mortgage.
Banks may have said no, but there are real lending options available to you right now. We work with B-lenders and private lenders across Ontario, Alberta, and Manitoba to get you approved.
Credit Score Guide
Why Banks Say No
Common Reasons for Mortgage Declines
Traditional banks use rigid automated scoring systems. If you fall outside their criteria, you get declined regardless of your actual ability to make payments.
Credit Score Below 600
Most A-lenders require a minimum beacon score of 620 to 680 depending on the product. Scores below this threshold trigger an automatic decline, even if your income and down payment are strong.
Bankruptcy or Consumer Proposal
An undischarged bankruptcy disqualifies you from most institutional lenders. Even after discharge, banks typically require 2 to 3 years of re-established credit before they will consider your application.
Collections and Judgments
Outstanding collections accounts, CRA liens, or court judgments signal risk to traditional lenders. Many banks will not approve you until these items are fully paid and settled.
Insufficient Credit History
Newcomers to Canada or anyone who has avoided credit products may have a thin file with too few trade lines. Lenders need at least two active credit accounts with 12 months of history to score your application.
Rate Comparison
A-Lender vs B-Lender vs Private
Lower credit scores mean higher rates, but there is a clear path from private or B-lender financing back to prime rates over time.
A-Lender
Credit Score: 680+
4.49% - 5.29%
Down Payment: 5% minimum
- Lowest available rates
- 30-year amortization option
- CMHC insurable
- Full income verification required
Most Common for Bad Credit
B-Lender
Credit Score: 500 - 679
5.49% - 7.99%
Down Payment: 20% minimum
- More flexible credit guidelines
- Stated income programs available
- 25-year amortization
- 1% lender fee typical
Private Lender
Credit Score: No minimum
7.99% - 14.99%
Down Payment: 25% - 35%
- Equity-focused approval
- No income verification
- 1-2 year terms
- Interest-only payments
Your Roadmap
Get Approved Now, Improve Rates Later
A bad credit mortgage is not a permanent solution. It is a strategic first step toward better rates and lower payments.
Get Approved Now
Secure your mortgage through a B-lender or private lender based on your current credit profile. Our sister site theprivatemortgages.ca specializes in private residential mortgage solutions for borrowers who need an alternative path to homeownership.
Rebuild Your Credit
Open a secured credit card, keep balances below 30% of your limit, and make every payment on time. Pay down existing debts starting with the smallest balances first to build momentum.
Monitor Your Progress
Check your Equifax and TransUnion reports every quarter. Dispute any errors and track your beacon score as it climbs. Most borrowers see meaningful improvement within 12 to 18 months.
Switch to an A-Lender at Renewal
When your mortgage term expires, we help you refinance with a prime lender at significantly lower rates. Many clients save $300 to $600 per month after rebuilding their credit and qualifying for A-lender terms.
Down Payment Guide
Down Payment Requirements by Credit Tier
| Credit Score Range | Lender Type | Minimum Down Payment | CMHC Insurable |
|---|---|---|---|
| 680+ | A-Lender (Bank / Credit Union) | 5% (under $500K purchase) | |
| 600 - 679 | B-Lender (Alt-A) | 20% typical | |
| 500 - 599 | B-Lender (subprime) | 20% - 25% | |
| Below 500 | Private Lender | 25% - 35% |
Common Questions
Bad Credit Mortgage FAQ
A-lenders (banks and credit unions) typically require a minimum beacon score of 620 to 680. B-lenders can work with scores as low as 500 to 550. Private lenders do not have a minimum credit score requirement because they approve based on property equity rather than credit history. As a mortgage broker, we have access to all three tiers and can match you with the best option for your current situation.
Yes. After discharge from a first bankruptcy, B-lenders may consider you immediately with a 20% down payment. A-lenders typically require a 2-year waiting period after discharge plus re-established credit. During a bankruptcy or consumer proposal that has not yet been discharged, private lenders can still approve you based on your property equity. We regularly help clients in all stages of the bankruptcy recovery process.
B-lender rates are typically 1% to 3% higher than prime A-lender rates. On a $400,000 mortgage, that works out to roughly $200 to $500 more per month. Private lender rates are higher still, typically 7.99% to 14.99%, but the terms are short (1 to 2 years) and designed as a stepping stone to better financing. The key is to view the higher rate as temporary while you rebuild your credit profile.
Most B-lenders report your mortgage payments to Equifax and TransUnion, which is a significant advantage. Making consistent on-time payments on a B-lender mortgage actively rebuilds your credit score. This is one of the main reasons we recommend B-lender financing over private when possible, as it helps you qualify for better rates at renewal time.
B-lenders typically require 20% down because bad credit mortgages are not eligible for CMHC insurance. Private lenders generally require 25% to 35% down, depending on the property location and condition. If you have a co-signer with strong credit, some B-lenders may accept 10% to 15% down. We can review your full picture and advise on the minimum down payment for your specific scenario.
Most clients who follow a structured credit rebuilding plan see their scores improve to the 680+ range within 18 to 24 months. The biggest factors are making every payment on time, keeping credit utilization below 30%, and allowing time to pass since any negative events. We provide a credit rebuilding roadmap with every bad credit mortgage we arrange and monitor your progress toward qualifying for better rates.
Do Not Let Bad Credit Stop You
We specialize in finding mortgage solutions for borrowers that banks have turned away. A free consultation takes 15 minutes and costs you nothing.