Bad Credit

Bad Credit Mortgage Canada: How a Broker Can Help You Qualify

Q: How low can my credit score be?

B-lenders go down to about 500 on owner-occupied fixed-rate files, and 600 on variable. Private lenders are largely score-agnostic: they often lend on the property's value rather than your income or score. Below 500, expect to need at least 25–35% down or equity.

Q: I just had a bankruptcy. When can I get a mortgage?

For insured financing, insurers require you to be discharged for a minimum of two years with a minimum two years of re-established credit. B-lenders and private lenders set their own, often shorter, requirements — we have placed files well inside that window where equity and income were strong.

Q: How long does a bad credit mortgage take from start to funding?

On our files, a private mortgage can fund in 7–14 days once we have your documents, and a B-lender file runs close to standard A-lender timelines. The variable is rarely the lender — it is how quickly you can produce income documents, discharge papers, and a current mortgage statement.

Past bankruptcy, consumer proposal, or missed payments — as a bad credit mortgage broker in Canada, serving Toronto, the GTA and Ontario, we work with alternative and private lenders who can get you a mortgage now, and we map your path back to a Big-6 bank within 12 to 24 months.

Credit score 500+Alternative lendersEquity-based options2+ years after dischargeNo judgmentPath back to a Big-6 bank

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Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #M14001433 · Updated September 2026 · Reviewed quarterly; next review November 2026

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Can I get a mortgage with bruised credit?

FSRA #13737| 15+ languages

100+ lenderscompared on one application

FSRA #13737licensed Ontario brokerage

15+ languagesspoken by our advisors

No credit pullto start your pre-approval

At Mortgage Squad Advisors we don't see a credit score — we see a person. Our alternative and private lender network specializes in credit-bruised files across Toronto and the GTA. We get you in now, then refinance you into A-lender pricing once your credit heals.

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The short answer

Credit score under 600? Recent bankruptcy or consumer proposal? You can still qualify. B-lenders consider scores from about 500 with 20% down, and private lenders underwrite the equity rather than the score (the 25 largest private MIEs averaged 9.6% in Q3 2025, per CMHC). Both are a bridge: we refinance you into an A-lender once your credit recovers, typically in 12 to 24 months.

What is a bad credit mortgage in Canada?

A bad credit mortgage is a Canadian home loan arranged through an alternative (B) or private lender when a damaged credit score, past bankruptcy, or consumer proposal rules out a bank. Approval leans on your home equity and provable income rather than your credit score, at a higher rate.

Instant check · no credit pull

Which lenders will approve your credit?

Move the slider to your ballpark credit score — see the lender tier that fits and the realistic rate premium.

Your Beacon score500

450850

Down payment / equity20%

5%50%

Alt-A / B-lender

Lender tier that fits your score

above A pricing, plus a ~1% lender fee

Expected rate premium

38+ lenders

Alternative and private lenders on our panel (as of October 2026)

e.g. Home Trust, Equitable Bank, Haventree Bank, MCAN Mortgage — and more, matched to your file. Very low scores or stated-income files may be capped at a lower LTV.

Ask Maya about this Start your pre-approval — 5 min Estimates only — a licensed advisor confirms your file. FSRA #13737.

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Do I qualify for a bad credit mortgage?What documents will I need?How fast can this close?

A-lender vs B-lender vs private mortgage: the honest comparison

Three tiers, three sets of rules. This is what actually separates them — minimum score, how much you can borrow against the property, what it costs, and how long it takes.

Comparison of A-lender, B-lender and private mortgage options in Canada by minimum credit score, maximum loan-to-value, typical rate, fees, term length and funding speed.
Compare lenders	A-lender (bank / monoline)	B-lender (alt-A)	Private lender
Minimum credit score	Generally 650+^{our data}; lenders treat 660 and up as acceptable risk^Equifax	From about 500 on owner-occupied fixed rate; 600 on variable^{our data}	Largely score-agnostic: private lenders often lend on the property's value rather than your income or score^FSRA
Maximum loan-to-value	Up to 95% insured with 5% down^CMHC; 80% uninsured, because under 20% down requires mortgage loan insurance^FCAC	Generally up to 80% — minimum 20% down^{our data}. OSFI expects federally regulated lenders to cap non-conforming files at 65% LTV^OSFI	Commonly 65–75% on a first mortgage^{our data}. The 25 largest MIEs averaged 58.0% LTV on single-family files in Q3 2025^CMHC
Typical rate	Best available market pricing — the benchmark the other two tiers are measured against	Above A pricing; the premium tracks your score, equity and how provable your income is^{our data}	The 25 largest MIEs averaged 9.6% on single-family lending in Q3 2025, down from 10.4% a year earlier^CMHC
Typical fees	No broker fee to you — the lender compensates the brokerage on funding	Commonly a 1% lender fee on the mortgage amount^{our data}	Lender fee ~1–2% plus broker fee ~1–2% (typically 2–4% combined), paid by you^{our data}
Typical term	Up to 10 years	Commonly one to three years^{our data}	Typically one to two years: a bridge, not a permanent mortgage^FSRA
Time to fund	Standard timelines — expect a few weeks from approval to close	Similar to A-lender timelines once the file is complete^{our data}	7–14 days on our urgent files^{our data}
Best for	Clean credit and provable income — the cheapest money available	A credit bruise, self-employment, or ratios a bank won't stretch to, with 20% down	Recent bankruptcy or proposal, urgent timelines, or a file no lender will score — where equity carries the deal

Figures are typical ranges, not a quote — your pricing depends on your equity, income and the lender we match you to. Rows marked our data come from Mortgage Squad Advisors’ own placements^{our data}; everything else is sourced below.

How to qualify for a bad credit mortgage in Canada, step by step

A bad credit mortgage broker in Canada works the file in a fixed order: understand the damage, match it to the tier that will underwrite it, then plan the way back to bank pricing.

Pull your credit and tell the full story
Know where your score sits on Equifax Canada's 300–900 scale^Equifax, and have discharge dates, current balances and income ready. We disclose every late payment to the lender rather than let an underwriter find it.
Work out your equity or down payment
B-lenders generally want a minimum 20% down^{our data}; private first mortgages typically land at 65–75% loan-to-value on our files^{our data}. The less a lender can lean on your score, the more it leans on equity.
Match the lender tier
B-lenders consider scores from about 500 on owner-occupied fixed-rate files^{our data}. Below that, or with a very recent bankruptcy or proposal, private lenders weigh the property over the score^FSRA.
Get every cost in writing before you commit
Expect a lender fee of about 1% on B-lender files^{our data}, and on a private mortgage a lender fee of ~1–2% plus a broker fee of ~1–2% (typically 2–4% combined)^{our data}. We disclose every dollar up front.
Fund, then rebuild deliberately
Keep every payment on time and credit utilization under 30% of your total limit^FCAC. If high-interest balances are dragging your score down, a debt consolidation mortgage can clear them in one move.
Refinance back to A-lender pricing
Most of our clients refinance in 12–24 months^{our data}. Insured financing after a bankruptcy or proposal needs two years since discharge plus two years of re-established credit^Sagen.

On this page

How low can your credit score be and still get a mortgage in Ontario?
Why equity matters more than your credit score on these files
What does a bad credit mortgage actually cost in Toronto and the GTA?
Bad credit mortgages in Toronto and the GTA: what the local market looks like
How do you get back to A-lender pricing? The recovery plan
Bankruptcy, consumer proposals, collections and self-employment
FAQ

How low can your credit score be and still get a mortgage in Ontario?

Around 500 for most B-lender programs, usually with about 20% down, and lower with a private lender, because private lenders lend mainly on the equity in the property^FSRA.

Bruised credit narrows the lender list; it rarely closes the door. We work with 100+ lenders overall, and the alternative and private specialists who take credit-bruised files are a subset of that same network^{our data} — which is why the tool above shows a smaller specialist count than the 100+ figure elsewhere on this page. B-lenders consider scores from about 500 on owner-occupied fixed-rate files, and 600 on variable, generally with a minimum 20% down^{our data}. Below that, you move into private territory, where lenders often lend on the property's value rather than your income or score^FSRA.

For context on where your number sits: Equifax Canada scores run from 300 to 900, treats anything below 560 as the "poor" range, and notes that lenders generally see 660 and up as acceptable, lower-risk borrowers^Equifax. The practical floor, then, is not really a number on a credit report — it is the equity and the story behind the score. We have closed files for clients whose score sat in the low 500s, and others with no recent score at all^{our data}. What changes as the score drops is the lender tier, the down payment expected, and the rate. The door stays open; the path simply changes shape.

Why equity matters more than your credit score on these files

On A-lender files, credit score and income ratios drive the decision. On alternative and private files, equity does. A B-lender will look at a 520 score very differently with 20% down versus 35% down — the larger cushion gives the lender room if anything goes wrong, so weaker credit becomes underwritable. Private lenders take this further: they lend against the property first and the borrower second^FSRA.

The loan-to-value reality follows from this. Insured financing allows as little as 5% down^CMHC, but any down payment under 20% requires mortgage loan insurance^FCAC — and insurers apply the credit rules described below. On B-lender deals, expect up to about 80% LTV with a minimum 20% down^{our data}; OSFI additionally expects federally regulated lenders to cap non-conforming residential mortgages at 65% LTV or less^OSFI. Private first mortgages typically land in the 65–75% range on our files^{our data}, and the 25 largest private MIEs averaged 58.0% loan-to-value on single-family lending in Q3 2025^CMHC. The equation is simple and honest: the less the lender can rely on your score, the more they rely on your skin in the deal.

What does a bad credit mortgage actually cost in Toronto and the GTA?

More than a bank mortgage: B-lenders price above A-lender rates and usually add a lender fee of about 1%, while private lenders charge more again plus fees. We put every number in writing before you commit. On the B-lender side, expect pricing above comparable A-lender rates plus a lender fee — commonly 1% of the mortgage amount^{our data} — usually on a one- to three-year term^{our data}. On the private side there is a hard published number to work from: the 25 largest mortgage investment entities charged an average interest rate of 9.6% on single-family lending in Q3 2025, down from 10.4% a year earlier^CMHC.

Private deals also carry fees. A lender fee of ~1–2% plus a broker fee of ~1–2% typically totals 2–4% of the loan amount, and on a private file you usually pay the broker directly rather than the lender paying us^{our data} — plus legal and appraisal costs. We disclose all of it in writing up front, because the worst thing we can do is surprise you at signing. These are typical ranges, not a live quote: your actual pricing depends on equity, income, and the lender we match you to. The cost is real, but it buys you something specific — ownership now, instead of years on the sidelines waiting for a bank to say yes.

Bad credit mortgages in Toronto and the GTA: what the local market looks like

Alternative lending is not a fringe corner of the Ontario market — it is a structural part of it. FSRA, the provincial regulator, counted 65,233 private residential mortgages worth $32.0 billion in Ontario in 2024, which is 15.8% of every mortgage registered in the province by count and 12.5% by dollar value, against a provincial total of 414,082 mortgages worth $256.0 billion^FSRA. Roughly one in six Ontario mortgages last year was private. If you are being told your situation is unusual, the provincial data says otherwise.

What that means practically in Toronto and the GTA is choice. High GTA property values mean a homeowner with a bruised score often holds enough equity to sit comfortably inside a private lender's 65–75% comfort zone, which is the single biggest factor in getting approved and in what you pay^{our data}. It also means competition among private lenders and MICs concentrated in the GTA, so a file that would be a take-it-or-leave-it offer in a thinner market can usually be shopped.

The trade-offs are local too. GTA closing timelines are typically 30 to 60 days on a resale purchase, and a private lender funding in 7 to 14 days can be the difference between holding a firm deal and losing a deposit^{our data}. On the caution side, FSRA has kept private mortgage brokering as a supervisory priority precisely because borrowers in this tier are vulnerable^FSRA — and CMHC's data shows the 90+ day delinquency rate on private lending reaching 1.96%, the fastest-rising of any lender type^CMHC. Which is exactly why we treat a private mortgage as a bridge with a dated exit, never as a destination.

How do you get back to A-lender pricing? The recovery plan

Rebuild your credit on schedule, then refinance: usually within 12 to 24 months on our files, or at least two years after discharge if you need insured financing after a bankruptcy or proposal^Sagen. If you are renting and no lender will fund you yet, a structured rent-to-own arrangement can build toward ownership while your credit recovers.

This is the part most brokers skip, and it is where we earn our keep. A B or private mortgage is a bridge, not a home. From day one we map your exit. Step one is getting you funded now on the right alternative product. Step two is re-establishing credit deliberately: two clean tradelines — a secured card and a small installment loan work well — reported on time every month, with credit utilization kept under 30% of your total limit, which is the level the Financial Consumer Agency of Canada advises^FCAC. Lenders read heavy utilization as risk even when you pay the balance in full each month^FCAC.

Step three is the refinance, and the timeline is set by the rules rather than by optimism. If you are coming out of a bankruptcy or consumer proposal and need insured financing, insurers require two years since discharge or fulfilment and two years of re-established credit^Sagen — so 24 months is the realistic floor, not a stretch goal. With 20% or more equity you are in uninsured territory, where the lender sets its own credit rules and a strong file can move sooner. In practice most of our clients refinance into A-lender pricing in 12 to 24 months^{our data}, and the savings on that refinance often exceed what they paid in premium over the bridge. We monitor your credit through the term so we can act the moment you qualify — your A-lender exit is mapped, not hoped for.

Bankruptcy, consumer proposals, collections and self-employment

Specific situations need specific answers, and we have placed all of them. Post-bankruptcy: for insured financing, insurers require a minimum two years since discharge plus a minimum two years of re-established credit^Sagen; B-lenders and private lenders set their own rules and are frequently shorter, particularly where equity is strong^{our data}. Consumer proposal: there are specialty paths even while a proposal is active and current, and options widen sharply once it is paid out and discharged — the same two-year insurer clock runs from the date you fulfil the terms^Sagen. Collections: outstanding collections usually need to be paid or explained, but they rarely sink an otherwise solid, equity-supported file.

Missed payments are weighed by recency — lates in the last 12 months hurt most, and we disclose every one rather than let an underwriter find it. Self-employed with bruised credit is our home turf: we document income through bank statements and notices of assessment instead of relying on a tidy T4, and B-lenders are built for exactly this file. Newcomers building Canadian credit get a parallel plan to establish tradelines fast. No judgment, and we work in 15+ languages so nothing gets lost in translation. If your situation is on this list, start with our consumer proposal or private lender pages for the detail specific to it.

If your credit is recovering and you’re thinking about a rental, see what an investment property mortgage in Canada requires. Homeowners who need equity without breaking their first mortgage should read about a second mortgage in Canada, and if high-interest debt is what’s holding your score down, a debt consolidation mortgage may be the first step. For the full process, read our complete guide to working with a mortgage broker in Canada. Find your local mortgage broker through our mortgage broker pages for Toronto, Vaughan and Mississauga.

What you get

Why borrowers with bruised credit choose Mortgage Squad Advisors.

B-lenders consider scores from about 500 on owner-occupied fixed-rate files^{our data}

Private lenders underwrite equity, not your score: the 25 largest MIEs averaged 58% loan-to-value^CMHC

Discharged bankruptcy? Insured financing opens two years after discharge^Sagen

Active or recently completed consumer proposal? Specialty lenders available

Up to 80% LTV on B-lender files with 20% down; 65–75% on a private first^{our data}

Exit strategy mapped from Day 1 (refi to A-lender in 12–24 months)

No-judgment process — your file is reviewed on merits, not on past mistakes

Private lenders can fund in 7–14 days on our files^{our data}

How it works

Three simple steps, no pressure.

Honest Conversation

Tell us what happened. Discharge dates, current balances, current income. We don't flinch.

Match The Right Lender

B or private depending on your equity, income, and credit story. We pick the cheapest path that works.

Approve & Plan The Exit

Fund the deal. Then we monitor your credit and refinance you into A-pricing as soon as you qualify.

Start your pre-approval — 5 min

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FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

How low can my credit score be?

B-lenders go down to about 500 on owner-occupied fixed-rate files, and 600 on variable^{our data}. Private lenders are largely score-agnostic: they often lend on the property's value rather than your income or score^FSRA. Below 500, expect to need at least 25–35% down or equity^{our data}.

I just had a bankruptcy. When can I get a mortgage?

For insured financing, insurers require you to be discharged for a minimum of two years with a minimum two years of re-established credit^Sagen. B-lenders and private lenders set their own, often shorter, requirements — we have placed files well inside that window where equity and income were strong^{our data}.

Active consumer proposal?

Some B-lenders will consider an active proposal if you are current on payments, and private lenders are more flexible still. Insured financing requires the proposal to have been fulfilled for at least two years, with two years of re-established credit^Sagen. Once it is paid off and discharged, options widen significantly.

What's the rate premium on a bad credit mortgage?

B-lender pricing sits above A pricing and usually carries a 1% lender fee^{our data}. The 25 largest private MIEs averaged 9.6% on single-family lending in Q3 2025^CMHC, plus a lender fee of ~1–2% and a broker fee of ~1–2% (typically 2–4% combined)^{our data}. The cost is real — it is the bridge to owning now instead of waiting years.

Can I improve my credit while in the mortgage?

Yes — and we coach you through it. Keep credit utilization under 30% of your total limit^FCAC and every payment on time. The goal is a refinance to A-lender pricing in 12–24 months; in our experience, the savings on that refinance can offset much of the premium paid over the bridge; your numbers will differ^{our data}.

Will I have to pay a broker fee?

On A and B lenders, no — the lender compensates us on funding. On private files the borrower usually pays the broker fee directly^{our data}; a lender fee of ~1–2% plus a broker fee of ~1–2% typically totals 2–4% of the loan, and we disclose every dollar in writing before you commit.

Will my missed payments be a deal-breaker?

Recent missed payments (the last 12 months) hurt more than older ones. We disclose every late payment to the lender — surprising the underwriter is the worst thing we can do, and a disclosed late is far more survivable than a discovered one.

Is there a minimum income requirement?

Yes, but lower than at an A-lender. Insured A-lender files are capped at 39% GDS and 44% TDS^CMHC; B-lenders stretch beyond those ratios at a higher rate. Private lenders care less about ratios and more about equity plus provable ability to carry the payment.

Can I get a mortgage with no credit history at all?

Yes. No credit history is a different problem from bad credit — there is nothing negative to overcome, just nothing to score. Lenders substitute alternative proof: 12 months of rent paid on time, utility and phone accounts, and insurance. Newcomers and young buyers qualify this way regularly. Private and B-lenders are the usual starting point^{our data}.

How long does a bad credit mortgage take from start to funding?

On our files, a private mortgage can fund in 7–14 days once we have your documents, and a B-lender file runs close to standard A-lender timelines^{our data}. The variable is rarely the lender — it is how quickly you can produce income documents, discharge papers, and a current mortgage statement.

Can I use a co-signer to get approved with bad credit?

Often, yes. A co-signer with strong credit and income can lift a file from private into B-lender pricing, or from B into A. The co-signer is fully liable for the debt and it appears on their credit report, so it is a real commitment — not a formality. Lenders still underwrite your credit story alongside theirs.

Can I get a second mortgage or HELOC with bad credit?

A second mortgage from a private lender is usually available where a HELOC is not — it is equity-driven, so score matters less. HELOCs are harder: OSFI limits the non-amortizing HELOC portion at federally regulated lenders to 65% LTV^OSFI, and those lenders still want acceptable credit. See how a second mortgage in Canada works, and our guide to a HELOC in Canada.

Can I refinance with bad credit?

Yes, if you have equity. A bad credit refinance consolidates high-interest debt into the mortgage, which usually drops your monthly obligations and lowers your credit utilization — the single fastest lever on a damaged score^FCAC. Prime (A-lender) refinances cap at 80% LTV^OSFI; a private second can go higher on the right property.

Related products

Complete guide to working with a mortgage broker in Canada Investment property mortgage Second mortgage & private lending Debt consolidation mortgage Find your local mortgage broker Can you get a mortgage with bad credit?Bad credit requirements Private lender for bad credit B-lender vs private mortgage Private Mortgage Rent-to-own path Alternative Lending CRA Debt Consumer Proposal Mortgage after bankruptcy (with bad credit)How lenders verify self-employed income Why a broker beats a bank decline Why mortgage applications are denied

Bad credit mortgage by city

Lender appetite, property values and timelines differ from market to market. Each page below applies this product to one city’s own sourced price data and local lending picture.

Bad credit mortgage in Montreal

Related guides

Go deeper on this topic.

Bad Credit Mortgage Requirements in Canada Private Lender vs Bank in Canada Joint vs Sole Mortgage in Canada How to Buy a House With Bad Credit in Canada (2026)7 Reasons a Mortgage Gets Declined in Canada (and What to Do Next) (2026)How Credit Scores Are Calculated in Canada (2026)

Sources & references

Figures on this page are sourced below and re-checked each quarter. Rates, insurer rules and lender policies change — confirm anything you plan to act on with a licensed advisor.

1. Equifax Canada, What is a good credit score in Canada? (accessed August 2026) — Credit scores run 300–900. Scores below 560 fall in the “poor” range; lenders generally see 660 and up as acceptable, lower-risk borrowers.
2. Canada Mortgage and Housing Corporation (CMHC), Residential Mortgage Industry Report, Spring 2026 edition (Spring 2026 edition, Q3 2025 data) — Table 2, top 25 mortgage investment entities (MIEs, a private-lender type): average single-family lending rate 9.6% in Q3 2025 (10.4% in Q3 2024), at an average 58.0% loan-to-value. The MIE 90+ day delinquency rate reached 1.96% in Q3 2025, rising faster than other lender types.
3. Sagen (mortgage default insurer), Underwriting Policies & Standards — Covenant Underwriting (accessed August 2026) — “Applicants must be discharged from bankruptcy or have fulfilled the terms of their consumer proposal for minimum 2 years” and “have a minimum 2 years re-established credit” to qualify for insured financing.
4. Office of the Superintendent of Financial Institutions (OSFI), Guideline B-20 — Residential Mortgage Underwriting Practices and Procedures (current guideline, accessed August 2026) — OSFI expects federally regulated lenders to cap conventional (uninsured) residential mortgages, including refinances, at 80% LTV; to impose a maximum LTV of 65% or less on non-conforming residential mortgages; and to limit the non-amortizing HELOC component to 65% LTV or less.
5. CMHC, General requirements to qualify for homeowner mortgage loan insurance (accessed August 2026) — Insured financing needs a minimum 5% down on the first $500,000 and 10% above it, a purchase price below $1,500,000, and debt-service ratios no higher than 39% GDS / 44% TDS.
6. Financial Consumer Agency of Canada (FCAC), How much you need for a down payment (accessed August 2026) — A down payment under 20% of the purchase price requires mortgage loan insurance — which is why 80% LTV is the practical ceiling on an uninsured mortgage.
7. FCAC, Improving your credit score (accessed August 2026) — “Try to use less than 30% of your total credit limit.” Lenders read high credit utilization as higher risk even when balances are paid in full each month.
8. Financial Services Regulatory Authority of Ontario (FSRA), Private Residential Mortgage Lending in Ontario Report 2024 (published August 20, 2025, covering 2024) — Ontario recorded 65,233 private residential mortgages worth $32.0 billion in 2024 — 15.8% of all mortgages in the province by count and 12.5% by dollar value, against a provincial total of 414,082 mortgages worth $256.0 billion.
9. Financial Services Regulatory Authority of Ontario (FSRA), What you need to know about alternate/private mortgages (accessed September 2026) — Private lenders (MICs, private companies, individuals) often lend on the property's value rather than income, may charge higher rates and fees, are often interest-only, and are typically a temporary option for one or two years that needs a realistic exit strategy.
10. Mortgage Squad Advisors, First-party data — our own placement and funding experience (reviewed August 2026) — Lender-network size, funding timelines, typical B-lender score floors, down payments and lender fees, private-mortgage fee ranges, and the “what we see on our files” observations on this page come from our own brokerage records, not a published third-party study. They are our experience, not an industry statistic.

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