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Bankruptcy Discharge

Mortgage After Bankruptcy in Canada — What's Possible After Discharge

A bankruptcy discharge is a fresh start, not a seven-year sentence. Once you're discharged and rebuilding credit, you may qualify with a B-lender, and A-lender pricing typically returns a couple of years post-discharge — all subject to lender approval.

Discharged → may qualify at BRe-establish creditPath back to APurchase or refinanceEquity-based optionsConfidential handling
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Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #M14001433 · Updated August 2026 · Reviewed quarterly; next review November 2026

Example 5-yr fixed
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rate as of Oct 13, 2026 · illustrative, not a quote
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25-yr amortization · semi-annual compounding
Property value$750,000
Down payment$150,000
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The myth is that a bankruptcy locks you out of homeownership for seven years. In reality, ‘seven years’ isn’t a mortgage rule at all — it’s roughly how long the record stays on a credit report (a first bankruptcy is generally six years from discharge, seven at TransUnion in some provinces), and lenders don’t simply wait it out. What actually moves a lender from no to yes is <strong>discharge plus re-established credit</strong>. Once you’re discharged and rebuilding, a B-lender may consider you, and A-lender pricing typically returns a couple of years later. Start rebuilding the day you’re discharged and the path back is measured in months, not years — though every approval is lender- and file-dependent.

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The short answer

You may be able to get a mortgage after bankruptcy sooner than you think — but it’s subject to lender approval, not automatic. The milestone is your discharge: once discharged and rebuilding credit, a B-lender may fund a purchase or refinance; A-lender pricing typically returns roughly two years post-discharge with re-established credit; and private financing is equity-based and can come sooner. The ‘seven years’ people fear is a credit-reporting period, not a mortgage rule. General information, not advice.

How soon can you get a mortgage after bankruptcy?

It depends on the lender and your file — and it’s subject to lender approval. The key milestone is your discharge (when the bankruptcy is legally closed). Once discharged and re-establishing credit, a B-lender may fund a purchase or refinance; A-lenders typically look for about two years post-discharge with clean re-established credit; and a private lender may lend earlier on equity. Discharge is the starting line, not a fixed waiting period.

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Your path back to a mortgage

Tell us where you are — we'll map the realistic timeline and the exit to A-lender pricing.

Situation
Status
19 months
Time since discharge
B-lenders — with 2 clean re-established tradelines
Where you stand today
About 24 months after discharge (~5 more), once 2 tradelines have at least 12 months of clean history
Estimated time to A-lender pricing

Re-establish 2 clean tradelines (secured card + small loan), reported on time, utilization under 30% — that’s what moves your score toward the A-lender exit.

Estimate only — not an approval. This is a simplified guide based on typical timelines. Your actual path depends on your full credit rebuild, income, equity and each lender’s and insurer’s own criteria, and is subject to lender review.

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The post-bankruptcy lender ladder — A vs. alt-A/B vs. private

Each rung trades a higher rate for earlier access; the goal is to climb off the alt rungs as your credit allows. Everything here is illustrative and subject to lender approval — lender policies and figures vary by file.

Comparison of A-lender, alt-A/B-lender and private financing after bankruptcy across eligibility, equity/down payment, speed, cost and exit.
DimensionA-lender (bank)Alt-A / B-lenderPrivate
Typical eligibility~2 years post-discharge + clean re-established credit (lender-dependent)Once discharged with credit re-establishment underwayDischarged, equity-based; can be earlier
Down payment / LTV*As low as ~5–10% with insurer approval when qualifiedCommonly ~10–20% downEquity-based, commonly ~25–35% down / ~65–75% LTV
SpeedWeeks~1–3 weeksOften 1–2 weeks, faster when appraisal, title and legal are ready
Relative costLowest — prime pricingModest premium over A + a lender fee*Highest: short-term, higher-rate credit plus lender and broker fees*CMHC
Best forThe destination once you've rebuiltBuying or refinancing soon after dischargeEquity files before re-establishment is complete
Exit strategyPrime pricing — the goalRefinance to A once ~2 yrs discharged + cleanRefinance to B or A as the file heals

*Down payment, LTV, rates and timelines are illustrative, vary by lender/insurer and file, and are subject to lender approval — not a quote or a guarantee. Private-lending characterization sourced to CMHC; A/B ranges are our rate desk's read (basis).

On this page
  1. How soon after a bankruptcy can you actually get a mortgage?
  2. The 'seven years' myth — credit reporting vs. lender policy
  3. What 're-established credit' actually means to an underwriter
  4. Timing scenarios: recent discharge, repeat, undischarged, and after a proposal
  5. Equity and down payment — the offsetting factors
  6. Bankruptcy vs. consumer proposal — for a mortgage
  7. Self-employed after bankruptcy
  8. The recovery plan: the mapped exit to A-lender pricing
  9. What to have ready — documentation checklist
  10. An illustrative example: a purchase after discharge
  11. FAQ

How soon after a bankruptcy can you actually get a mortgage?

The clock that matters is your discharge date, not your filing date — discharge is when the bankruptcy is legally closed and rebuilding begins, and most lenders measure from that day. Most first bankruptcies are discharged automatically after 9 months, or 21 months if surplus income payments are required.OSB All of the following is subject to lender approval and varies by file.

For A-lenders (banks and prime monolines), a common guideline is roughly two years past discharge paired with re-established credit reporting clean — but it’s a guideline, not a statute, and underwriters weigh it alongside down payment, income stability and how cleanly you’ve rebuilt. Some files clear sooner when offsetting factors are strong (a large down payment, secure long-tenure employment, pristine new trade lines). B-lenders may move faster, funding a purchase or refinance once you’re discharged with re-establishment underway. Private lenders underwrite on equity, so a sufficient down payment or existing home equity can open a file earlier. The earlier you borrow, the higher the rate — which is exactly why this is a bridge, not a destination.

The 'seven years' myth — credit reporting vs. lender policy

The single most common fear after a bankruptcy is that you must wait ‘seven years’ to get a mortgage. That figure conflates two different things, and neither is a mortgage waiting period. First, credit reporting: a first bankruptcy generally stays on your credit report for six years from discharge (seven at TransUnion in Newfoundland and Labrador, Ontario, Prince Edward Island and Quebec), and a second bankruptcy stays fourteen years.bureaus Treatment varies by bureau and province, so check your own report.

Second, lender policy: lenders don’t simply wait for the record to age off. A-lenders commonly look for about two years post-discharge with clean re-established credit; B-lenders and private lenders act sooner. So the record may sit on your bureau for years while you’re already financeable — the aging record and your new clean credit run on separate tracks. The practical takeaway: don’t plan around ‘seven years.’ Plan around discharge plus rebuilding.

What 're-established credit' actually means to an underwriter

‘Re-established credit’ is a specific test, not a vague sense of being responsible again. Underwriters commonly want to see at least two new trade lines — opened after discharge — each reporting clean for 12 or more months with no missed payments, though exact requirements vary by lender.

The trade lines need real substance: a secured credit card with a meaningful limit plus a small installment or car loan is the classic pairing; two tiny store cards rarely satisfy the same reviewer. Utilization matters too — carrying a card near its limit reads as stress even when payments are perfect, so keeping balances low (well under half the limit) strengthens the file. The goal is a clean, recent payment story that outweighs the bankruptcy in an underwriter’s eyes. Two clean trade lines reporting 12-plus months is generally the single biggest lever that moves a file from B-lender territory toward A-lender pricing. See our rebuild-credit guide.

Timing scenarios: recent discharge, repeat, undischarged, and after a proposal

A few distinctions reshape your options more than almost anything else. Undischarged: the bankruptcy is still legally open, and the vast majority of lenders wait until you’re formally discharged before funding — discharge is the gate. Recently discharged: a B-lender may fund with re-establishment underway; a private lender may lend on equity even sooner. Repeat (second) bankruptcy: it reports far longer (14 years), and most A-lenders want it well aged or clearly past the two-year-plus mark with strong rebuilding, so B-lender and private financing carry these files longer.

Bankruptcy then a consumer proposal (or vice versa): lenders generally look at the most recent insolvency event for timing, and the recovery timelines can stack. With strong re-establishment, both eventually fall off and A-lender pricing returns. We map your exact discharge dates and event history so the timeline is precise, not guesswork — and none of these cases is a dead end.

Equity and down payment — the offsetting factors

After a bankruptcy, equity and down payment do a lot of the heavy lifting, because they reduce the lender’s risk and can offset a still-healing credit file. On a purchase, a larger down payment widens the lender list and can unlock better pricing sooner; at the A-lender stage with strong re-establishment, insured purchases at lower down payments may become possible with insurer approval. On a refinance of a home you kept through the bankruptcy, your existing equity is often what makes an early B-lender or private deal work at all — the file is underwritten on the home’s value as much as on credit.

The general rule: the more equity or down payment you bring, the earlier and cheaper your options, and the more likely a private or B-lender will fund before your credit is fully re-established. Exact loan-to-value limits are lender-, property- and file-dependent (illustratively up to ~80% at alt-A, ~65–75% on private).basis

Bankruptcy vs. consumer proposal — for a mortgage

Bankruptcy and a consumer proposal are different legal tools, and lenders read them differently. A bankruptcy is a formal insolvency that’s discharged, then reports for six years (first; seven at TransUnion in some provinces) or 14 years (second); lenders time from discharge. A consumer proposal is an agreement to repay part of what you owe, and lenders generally time from its completion, with the record removed 3 years after it’s paid off or 6 years after it was signed, whichever comes first.FCAC Neither locks you out of a mortgage — both follow the same pattern of discharge/completion plus re-established credit, then a climb from B-lender toward A-lender pricing.

Which matters more for your file depends on your event history and dates. If you’ve had both, lenders usually focus on the most recent event. For the full side-by-side, see our bankruptcy vs consumer proposal guide and the consumer proposal mortgage page.

Self-employed after bankruptcy

Self-employed borrowers rebuilding after a bankruptcy face two overlapping challenges — the discharge and income that doesn’t show cleanly on a T4 — and the good news is that the same alternative lenders solve both. B-lenders and private lenders that work with a recent discharge also underwrite business-for-self and stated income through business bank statements and financials, so a business owner isn’t doubly penalized.

Documentation still matters — business financials, bank statements, your discharge certificate, and evidence of re-established credit — but the combination is very much workable. See our self-employed mortgage playbook for how we document business income, and we’ll fit it to the post-discharge lenders on the same file.

The recovery plan: the mapped exit to A-lender pricing

Borrowing on an alt mortgage isn’t the plan — it’s step one of it. The differentiator is the mapped exit back to A-lender pricing, built as a roadmap with conditions before you sign the first deal, not a guaranteed date. The conditions are consistent: the bankruptcy is discharged; you’ve re-established credit (commonly two clean trade lines seasoned ~12+ months); your income and ratios support the file; and enough time has passed since discharge (many A-lenders look for roughly two years).

We get you funded today on the cheapest rung you qualify for, then set a refinance-trigger target and monitor your recovery against it. When you clear the bar, we re-shop and move you onto A pricing — and for many clients the interest saved over the eventual A-lender term exceeds what they paid in alt premium during the rebuild. Timelines are lender- and file-dependent, not guaranteed.

What to have ready — documentation checklist

Having the right documents ready speeds everything up. Gather: your discharge certificate (or, if not yet discharged, your bankruptcy documents); a recent credit report showing your re-established trade lines; your current mortgage statement and property details if you own; income and employment documents (pay stubs and T4s, or business statements and financials if self-employed); an estimate of property value and your down payment or equity; a list of any remaining debts; and government ID.

You don’t need all of it to start — your discharge date and a rough picture of your rebuild are enough for us to map options — but the fuller the picture, the faster and sharper the plan.

An illustrative example: a purchase after discharge

This is an illustrative example — a composite of common files, not a specific client, and not a guaranteed outcome. A borrower discharged from a first bankruptcy about eighteen months earlier has done the rebuild right: a secured card and a small car loan, both reporting clean for over a year, low balances, steady employment. A bank still says no on the two-year guideline. Working with a B-lender that accepts a discharged bankruptcy with re-established credit and a reasonable down payment, the purchase funds — with a written plan to refinance to A-lender pricing once the file crosses the two-year mark with clean credit.

The point of the example is the sequence, not any dollar figure: discharge, rebuild deliberately, buy at a B-lender if you need to, and set the exit to prime. Every real file differs by discharge history, credit, income and down payment — and every approval is subject to lender review. We assess yours specifically.

What you get

Why Canadians choose Mortgage Squad Advisors.

Discharged bankruptcy: a purchase, refinance or HELOC may be available at a B-lender, subject to approval
Re-established credit (commonly two trade lines reporting ~12+ months clean) is what moves lenders
A-lender pricing typically returns ~2 years post-discharge with clean re-establishment (lender-dependent)
Private mortgage option for equity-based files before re-establishment is complete
Refinance LTV is equity-based — up to ~80% at alt-A, subject to lender/property/file*
Lower down payments may be possible post-discharge with insurer approval*
Second-bankruptcy and bankruptcy-then-proposal files mapped individually — still workable
A mapped plan to refinance toward A-lender pricing as your credit re-establishes
No judgment — bankruptcy is a legal fresh-start tool
All lender + broker fees disclosed in writing before you commit
How it works

Three simple steps, no pressure.

  1. 1

    Discharge snapshot

    Tell us your discharge date and what you've rebuilt since — a secured card, a small loan, a car loan, any trade line reporting. We map your options, usually within 24 hours, and tell you which lenders may be open to you today and which open at the next milestone.

  2. 2

    Match the lender

    Discharged with re-established credit → a B-lender purchase or refinance may fit. Discharged but still rebuilding → a private option against equity. Enough time post-discharge with strong re-establishment → we test A-lenders. We aim for the cheapest path that approves.

  3. 3

    Plan the path to A

    We set a refinance-trigger target — commonly around the two-year post-discharge mark with clean credit — and monitor your recovery. When you qualify for A-lender pricing, we re-shop and move you off the alt rate. Timelines vary by lender and file.

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FAQ

Common questions, answered.

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

How long after bankruptcy can I get a mortgage?
It's subject to lender approval and varies by file. A B-lender may consider you once you're discharged and re-establishing credit; A-lenders commonly look for about two years post-discharge with two trade lines reporting clean for 12+ months; and equity-based private financing can sometimes happen sooner. Discharge is the starting line, not a fixed waiting period.
Does 'seven years' apply to mortgages after bankruptcy?
No — 'seven years' isn't a mortgage rule. It roughly reflects how long the record stays on a credit report: a first bankruptcy generally six years from discharge (seven at TransUnion in Ontario and some other provinces), a second 14 years.bureaus Lenders don't just wait it out — they look at discharge plus re-established credit, so you may be financeable well before the record ages off.
What counts as 're-established credit'?
Lenders commonly want to see two active trade lines opened after discharge — for example a secured credit card and a small installment or car loan — each reporting clean for 12+ months with a meaningful limit and low utilization. Requirements vary by lender, but two clean seasoned trade lines is generally the biggest factor moving you from B toward A eligibility.
How much down payment do I need after bankruptcy?
It depends on stage and lender, illustratively: recently discharged at a B-lender, commonly ~10–20% down; further post-discharge with strong re-establishment, as low as ~5–10% with insurer approval; private, equity-based (~25–35%). Ranges vary by lender/insurer and are subject to approval.
Can I refinance my home after a discharge?
If you kept your home and have equity, often yes — through a B-lender (or private if you're still rebuilding) to consolidate debt, fund a need, or improve terms, subject to lender approval. Your equity is frequently what makes an early post-discharge refinance work.
Does the bankruptcy stay on my credit report forever?
No. A first bankruptcy generally stays six years from discharge (seven at TransUnion in Ontario and some other provinces); a second, 14 years.bureaus What restores full pricing is the combination of the record aging and new, clean re-established credit.
What if this is my second bankruptcy?
It's a longer road but generally still workable. A second bankruptcy reports far longer, and most A-lenders want it well aged or clearly past the two-year-plus mark with strong rebuilding — so B-lender and private financing typically carry these files in the meantime. We map the exact timeline on your file.
I had a bankruptcy and then a consumer proposal — which matters?
Lenders generally look at the most recent insolvency event for timing, so the proposal's completion often governs. The timelines can stack, but with strong re-establishment both eventually fall off and A-lender pricing returns. See our consumer proposal page and comparison guide.
What's the rate premium on a post-bankruptcy mortgage?
More than a bank, deliberately and temporarily. Illustratively, a B-lender prices above A-lender rates plus about a 1% lender fee; private is materially higher, since CMHC describes private and mortgage-investment-entity lending as short-term, higher-rate credit, plus fees.CMHC The premium is temporary — the plan is to refinance to A pricing once you're enough time post-discharge with clean credit, which often saves more over a term than the premium costs.
Can I get this if I'm self-employed?
Yes — the B-lenders and private lenders that work with a recent discharge also underwrite business-for-self income through bank statements and financials rather than line 15000 alone. See our self-employed mortgage guide.
How do I start rebuilding credit today?
Open a secured credit card (several banks and issuers offer them), use it for small monthly purchases, and pay the full balance every cycle. After 6–12 months add a second trade line, and keep utilization low. After ~24 months of clean reporting you're a substantially more financeable borrower — see our rebuild-credit guide.
Is this confidential?
Your file is handled confidentially and shared only with the parties needed to arrange the financing. Your discharge is a credit-bureau record, not a public broadcast — your employer isn't notified by us or the lender. We don't disclose your situation beyond what's required to fund the deal.

Related products

Consumer proposal mortgageBad credit mortgagePrivate mortgageB-lender mortgageAlternative lending (overview)Self-employed mortgageJudgment & lien mortgagePrivate mortgage after bankruptcyGuide: how soon after bankruptcy?Guide: rebuild creditGuide: bankruptcy vs proposalCase study: bought 18 months after dischargeCase study: refinanced with home equityCase study: after a second bankruptcy

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. 1. Canada Mortgage and Housing Corporation (CMHC), Residential Mortgage Industry Report (accessed September 2026) — Mortgage investment entities and other private lenders provide short-term loans at higher interest rates to borrowers who don't qualify with traditional lenders.
  2. 2. Mortgage Squad Advisors rate desk (internal verification), Illustrative A-lender / B-lender pricing and LTV ranges (reviewed August 2026) — B-lender post-bankruptcy files typically price above A-lender rates plus about a 1% lender fee; down payments and LTV vary by stage, lender and insurer. Illustrative, not a quote — live A-lender pricing is on our rates page.
  3. 3. Financial Consumer Agency of Canada, What's in your credit report (accessed September 2026) — Both bureaus usually remove a first bankruptcy 6 years after discharge; TransUnion keeps it 7 years in Newfoundland and Labrador, Ontario, Prince Edward Island and Quebec. A second bankruptcy is kept 14 years.
  4. 4. Office of the Superintendent of Bankruptcy, Understanding bankruptcy discharge (accessed September 2026) — Most first bankruptcies are discharged automatically after 9 months, or 21 months where surplus income payments are required.

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