Bad Credit Mortgages

Yes. Major banks typically require a credit score of 650+, but B-lenders (Home Trust, Equitable Bank, MCAP Eclipse) will work with scores as low as 500, and private lenders focus on your equity and ability to pay rather than credit score. Approximately 20% of Canadian mortgages funded in 2026 were through B or private channels.

With a B-lender, you can qualify for a mortgage with a credit score as low as 500, provided you have at least 20% down payment and provable income. Private lenders can go below 500 if equity is strong enough (typically 25%–35% down).

B-lender rates in 2026 typically range from 5.99%–7.49% on 1-year and 2-year terms, plus a 1% lender fee. Private mortgages range from 7.99%–12.99% depending on LTV, plus a 1%–3% broker fee and 1%–2% lender fee.

B-lenders typically require 20% minimum down payment (CMHC insurance is not available to B-lenders on rentals or bruised-credit files). Private lenders usually require 25%–35% down. More equity means better rates and more lender options.

Yes. Most B-lenders require 2 years of re-established credit after discharge, and A-lenders typically require 2 years after discharge plus a clean credit rebuild. Private lenders will fund immediately after discharge if equity supports it.

Yes — B-lenders and private lenders will consider you while still in a consumer proposal, provided you have 25%+ down payment or equity. A-lenders typically require the proposal to be fully paid off plus 2 years of re-established credit.

Usually yes. The strategy for most bad-credit clients is: fund a B-lender or private mortgage now, use the 1–2 year term to rebuild credit through on-time payments and any residual debt cleanup, then refinance to a prime A-lender at renewal — often saving 1.5%–3% in interest.

Yes. If you have equity in your home (typically 20%+), refinancing is often possible even with poor credit. B-lenders and private lenders both offer refinance products, and the funds can be used to consolidate high-interest debt — often reducing your monthly obligations enough to rebuild credit faster.