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Qualification

Credit score

Definition

A 300–900 score from Equifax or TransUnion summarizing your credit history.

Roughly 680+ opens the widest range of A-lender options; CMHC-insured mortgages need at least one borrower at 600 or higher; lower scores usually route to alternative (B) lenders.

Lenders care most about payment history and utilization. Paying every bill on time and keeping balances under ~30% of each card's limit moves the needle faster than anything else. A single missed payment can cost dozens of points and lingers for years.

For a mortgage, the rough bands are: 680+ for the widest choice of A-lender pricing; 600–680 workable at many A lenders on insured files but with fewer options; and below 600 usually B or private lending with a credit-repair exit plan. Lender criteria vary, and a co-applicant's score matters too.

Checking your own score is a soft pull and never hurts it. A mortgage application is a hard inquiry: it stays on your Canadian credit report for about three years, but its effect on your score is small and fades within months. A broker who shops your file typically pulls credit once rather than having each lender pull separately.

Sources

  1. How long information stays on your credit report (Financial Consumer Agency of Canada)
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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.

Debt service ratio

The percentage of your gross income that goes to housing (GDS) or to housing plus all other monthly debt payments (TDS). On insured mortgages, CMHC caps GDS at 39% and TDS at 44%; the ratios are calculated at the stress-test qualifying rate.

Down payment

The cash you put toward the purchase. Minimums: 5% on the first $500K and 10% on the portion from $500K to $1.5M; at $1.5M or more, 20%. Below 20% requires CMHC, Sagen, or Canada Guaranty insurance.

GDS

Gross Debt Service ratio

Gross Debt Service ratio: your monthly housing costs (mortgage principal and interest, property tax, heating, and 50% of condo fees) divided by your gross monthly income. CMHC caps GDS at 39% on insured mortgages; uninsured and alternative lenders set their own limits.

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.

Stress test

The check that you could still afford your mortgage at a higher "qualifying rate": the greater of your contract rate + 2% or 5.25%. OSFI sets it for uninsured mortgages at federally regulated lenders, and the federal government applies the same test to insured mortgages. It limits how much you can borrow, not what you pay.