Qualification

Consumer proposal

A formal arrangement under the Bankruptcy and Insolvency Act to repay creditors a portion of what you owe. Active proposals route mortgages to B and private lenders; A lenders typically require 24 months of clean post-proposal credit.

A consumer proposal is a legally binding deal, administered by a Licensed Insolvency Trustee, to repay creditors a portion of your debt over up to five years — a middle ground between struggling with payments and declaring bankruptcy. It stops collection calls and interest immediately.

While it's active, A lenders won't touch a mortgage, but B and private lenders will, often using home equity to pay the proposal out in full (which can also rebuild credit faster). After it's complete, A lenders typically want about 24 months of clean re-established credit.

Owning a home with equity during a proposal is actually an advantage — refinancing to settle it early can shorten the road back to prime mortgage rates.

Related on Mortgage Squad Advisors

Mortgage after consumer proposal

More on Qualification

All terms →

Co-signer

A creditworthy individual (often a parent) who agrees to be equally liable for the mortgage so the primary applicant qualifies. The co-signer's income is added to the application; their credit is fully exposed.

Credit score

A 300–900 score from Equifax or TransUnion summarizing your credit history. 680+ unlocks most A-lender rates. 600-680 typically routes to alt or B lenders.

Debt service ratio

The percentage of your gross income that goes to housing (GDS) or all monthly debt obligations (TDS). OSFI's stress test caps GDS at 39% and TDS at 44% on insured files.

Down payment

The cash you put toward the purchase. Minimums: 5% on the first $500K, 10% on $500K–$1M, 20% above $1M. Below 20% requires CMHC, Sagen, or Canada Guaranty insurance.

GDS

Gross Debt Service ratio

Your housing costs (mortgage payment + property tax + heating + 50% of condo fees) as a percentage of gross income. Most lenders cap GDS at 39% on insured files, 44%+ at alt lenders.

Qualifying rate

The stress-test rate you must qualify at: the greater of your contract rate plus 2% or 5.25%. Doesn't change what you actually pay — only whether you qualify.

Meet Maya

Canada’s 24/7 AI mortgage advisor.

Have a question right now? Maya answers instantly — in 50+ languages. Real humans on every file. Best-rate guarantee, or we pay you $500.

Instant answers
50+ languages
Instant payment math
Voice calls

Chat with Maya Call live Book a meeting with an advisor

Maya · AI advisor

Typing…