Clearing CRA is step one — the exit is step two
If you used a B-lender or private mortgage to clear a CRA balance or lien, you solved the urgent problem — but you’re now carrying a higher rate than you need to long term. The goal from here is the exit: refinancing back to A-lender (prime) pricing once your file has stabilized. This guide is that roadmap: the conditions you need to meet, roughly how long it takes, and how to get there efficiently.
Done well, the whole arc — clear CRA now at an alternative rate, then refinance to prime in around 12–24 months — often recovers more on the exit than the premium ever cost. For the service, see our CRA debt mortgage page. This is general information, not tax or legal advice.
The conditions an A-lender wants to see
To move you back to prime, an A-lender needs a few things true — and knowing them tells you exactly what to work on:
- CRA cleared and clean title — the balance is paid, any lien is discharged, and CRA is current.
- A clean recent tax history — you’ve filed and remitted on time since, with no new arrears building. This is the big one after CRA debt.
- Re-established or maintained credit — on-time payments, low utilization, no new derogatory marks.
- Provable income and ratios — income that supports the payment under the stress test, at up to 80% loan-to-value on a refinance.
None of these is a fixed threshold — each lender sets its own — but together they’re what turns an A-lender’s answer from no to yes.
The recovery timeline
Realistically, the exit tends to open around 12–24 months after clearing CRA, and the single biggest factor is your tax compliance since. A borrower who clears CRA and then files and remits perfectly for the next year or two looks very different to a lender than one who clears the old balance but lets a new one start building.
If you’re self-employed, the timeline often ties to filing your next one or two years of returns cleanly, so the lender can see stable, current income with no CRA arrears. The date isn’t fixed — a strong file with good income and equity can qualify sooner at some lenders — but 12–24 months is a sensible planning anchor, not a guarantee.
What to do during the bridge
The months on your alternative mortgage are the rebuild window, and a few habits make the exit faster and cheaper. File and remit on time, every time — this is non-negotiable after CRA debt, and a single new arrears can reset the clock. Set aside for installments if you’re self-employed so you never fall behind again. Keep your credit clean — on-time payments, low balances. And keep good records so your next refinance application is quick to document.
Match your alternative mortgage term to this plan: a short term (often 1–2 years) that matures around when you expect to qualify means you refinance at or near maturity and minimize any prepayment penalty. We set that up at the first funding rather than leaving it to chance.
Timing the refinance and the penalty
When you refinance back to A pricing, two numbers matter: your alternative mortgage’s maturity and any prepayment penalty. Ideally you refinance at or near maturity and pay little or nothing to exit. If you qualify well before maturity, run the math — the interest saved by moving early versus the penalty to break the term — because sometimes breaking early still wins, and sometimes it’s worth waiting a few months.
Private mortgages in particular can carry an interest guarantee or discharge terms that affect timing, so confirm those up front. A good broker sets a refinance-trigger target at the outset and monitors your file, so the day you qualify for prime, the exit is already in motion rather than something you have to remember to chase.
Getting the exit planned properly
The clients who exit fastest are the ones whose broker planned the exit before the first mortgage even funded — the right term, the compliance discipline, the refinance trigger. If you’re already in an alternative mortgage after CRA debt without a clear exit plan, it’s not too late to build one.
Mortgage Squad Advisors (FSRA #13737) maps the exit from A-lender pricing on every CRA-debt file and monitors your recovery to prime. See the CRA debt mortgage page, or get a confidential assessment — no credit pull to begin. General information only; confirm tax specifics with your CPA or a tax professional.