Consumer Proposal

Mortgage After a Consumer Proposal in Canada — Active & Discharged Options

Yes — sooner than you think. Whether your proposal is active or discharged, there's a path: specialty B-lenders and private capital fund active files, discharged files open wider B-lender options, and A-lender pricing comes back as your credit re-establishes.

Active OK (B/private)Discharged → wider BPath back to ARe-establish creditEarly payout option100% confidential

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Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #M14001433 · Updated October 2026 · Reviewed quarterly; next review January 2027

In or past a consumer proposal?

There is a real path back. No judgment.

Whether you're still making payments or already discharged, we work with lenders who'll help you rebuild — and we show you exactly how to get back to a Big-6 bank.

Your path backActive

ActiveDischarged+12 mo clean~2 yrs after

Specialty B + private

20-35%

Down (active)

10-20%

Down (recently completed)

~2 yrs

To A-lender (after completion)

Private

Confidential handling

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I have a consumer proposal — when can I get a mortgage?

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Many Canadians in or after a consumer proposal are told by their bank they’ll have to wait years before a mortgage is possible — but that’s not the whole picture. What’s realistic depends on your stage and your file, not a single rule. Active proposals can often be financed today through specialty B-lenders and private capital. Discharged proposals open up B-lender options, and A-lender pricing typically returns as you re-establish credit over the following couple of years. The path back is real, and starting it sooner is almost always better than waiting.

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The short answer

You can get a mortgage after a consumer proposal — and often during one. What's realistic depends on your stage (active vs discharged), your re-established credit, income, equity and property. Active proposals are typically B-lender or private files; discharged proposals open wider B-lender options, with A-lender pricing returning as your credit rebuilds. Figures on this page are illustrative and lender/file-dependent — not guarantees.

What is a consumer proposal — and can you get a mortgage with one?

A consumer proposal is a legally binding agreement, filed through a Licensed Insolvency Trustee, to repay creditors part of what you owe (over no more than five years)^OSB — a formal alternative to bankruptcy. You can often get a mortgage during an active proposal through specialty B-lenders or private capital, and more options open once it’s discharged. What’s possible depends on your stage, credit, income, equity and property.

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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

Completion date

19 months

Time since completion

B-lenders — with 2 clean re-established tradelines

Where you stand today

About 24 months after completion (~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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Do I qualify for a post-proposal mortgage?What documents will I need?How fast can this close?

Active vs. discharged: how your mortgage options change by stage

Where you are in the proposal lifecycle changes the lender list, the down payment, the rate and the likely options. Every figure below is illustrative and lender/file-dependent — not a quote or a guarantee.

Consumer proposal mortgage options compared across active, recently discharged, and about 2+ years after completion, by lender type, down payment, rate, credit requirement and likely options.
Factor	Active proposal	Recently discharged	About 2+ years after completion
Lender type	Specialty B-lenders + private	Wider B-lender pool	B-lenders, and eventually A-lenders
Down payment*	Higher — commonly ~20–35%	Commonly ~10–20%	As low as 5% on the first $500,000 (10% on the portion up to $1.5M) for an insured A-lender purchase, once insurer criteria are met
Rate*	B-lender premium or equity-based private	B-lender premium over A	Moving toward A-lender pricing as you qualify
Credit requirement	Current on proposal payments + a reporting trade line	Re-established credit building; 2+ clean trade lines seasoned ~12+ months	Typically 2+ years since completion and 2 years of re-established credit (2+ trade lines) — insurer criteria apply
Likely options	Purchase or refinance via specialty B or private	Refinance, purchase or HELOC at a B-lender	Insured A-lender purchase becomes realistic

*Down payments, rates and timelines are typical/illustrative, vary by lender, insurer and file, and are subject to lender review — not guaranteed outcomes. Private-lending characterization sourced to CMHC; A/B ranges are our rate desk’s read (basis).

On this page

Can you get a mortgage while still in a consumer proposal?
How you qualify: the factors that actually decide your file
Paying out your consumer proposal early with home equity — the math
Buying your first home after a proposal: the FHSA and Home Buyers’ Plan still apply
The exit strategy: your roadmap back to A-lender pricing
Self-employed and in a consumer proposal
Which lenders finance a consumer proposal — and in what order?
FAQ

Can you get a mortgage while still in a consumer proposal?

Often, yes. A consumer proposal is a legal arrangement filed through a Licensed Insolvency Trustee — not a bankruptcy — and a narrow set of specialty B-lenders, plus private capital, will consider funding you mid-proposal once you can show you’re current on your trustee payments.

The trade-off is structure, not an automatic refusal. Expect a higher down payment (commonly ~20–35%), a rate premium on a B-lender file or equity-based pricing on a private, and a lender that wants proof the proposal is being serviced and that you’ve re-established at least one reporting trade line. A-lenders are generally the exception — most want the proposal paid out, discharged, and your credit rebuilt first — so an active file is usually a B or private placement. All figures here are illustrative and depend on the lender and your file.

The point of taking an alternative mortgage now is to leave it. We map the A-lender exit from day one, with a target trigger — not an open-ended commitment to premium pricing.

How you qualify: the factors that actually decide your file

Approval on a proposal file turns on a handful of factors, and knowing where you stand on each tells you what’s realistic. Proposal status (active vs discharged) and your discharge date set the lender list. Re-established credit — ideally two or more trade lines reporting clean for 12+ months, with low balances — is what moves a lender from no to yes. Income and debt service still have to support the payment. And because much of this is equity-based, property value, your existing mortgage and remaining equity often matter more than credit on a private file.

No single factor decides it, and none of these is a guaranteed threshold — lenders and insurers each set their own criteria and review every file. What we do is read your file against the lenders most likely to approve it, and tell you honestly what stage you’re at.

Paying out your consumer proposal early with home equity — the math

If you own a home with equity, refinancing to settle your proposal early can be the fastest route back to prime — but only when the numbers work, so here’s the framework to check it. Start with your home value and subtract your existing mortgage to find your equity. The most an alternative lender will typically advance is about 80% of value at alt-A or 65–75% on private*, so calculate the refinance amount available above your current balance. From that, subtract the proposal payout (the amount to settle in full through your trustee) and the fees (lender, broker, legal). What’s left is your remaining equity — and the exercise only makes sense if the refinance still leaves you with a sensible cushion.

The upside: settling the proposal completes it — the 3-year credit-report clock and lenders’ time-since-completion start immediately — and a 60-month term can compress to the time it took to close — accelerating your path to A-lender refinancing. The premium you carry on a short alternative mortgage is often less than years of premium pricing while a proposal runs its full term. But it is not universally worth it: if the payout eats most of your equity, or your credit rebuild is the real bottleneck, waiting can be smarter. We model the full lifecycle so the decision is numbers, not a pitch, and we won’t recommend a payout that doesn’t measurably improve your timeline.

Buying your first home after a proposal: the FHSA and Home Buyers’ Plan still apply

A consumer proposal doesn’t disqualify you from Canada’s first-time-buyer programs; what matters is first-time-buyer status. For the FHSA you generally count as a first-time buyer if neither you nor your spouse or common-law partner lived in a home either of you owned at any time in the current year or the previous four calendar years.^CRA The FHSA lets you save for a down payment tax-deductible going in and tax-free coming out, and the RRSP Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSPs toward a first home.^CRA Provincial land-transfer-tax rebates can apply too, and all of these stack with an insured purchase once you reach the A-lender stage.

That makes the credit-rebuild window a good time to build the down payment as well: your credit and your cash improve on the same timeline, so you reach the low-down-payment stage ready. If you need to buy sooner, a B-lender purchase gets you into a home now and we refinance you to A-lender pricing once the rebuilt file qualifies. See our first-time buyer resources.

The exit strategy: your roadmap back to A-lender pricing

An alternative mortgage only works if it ends, so the exit is planned on day one — as a roadmap with milestones and conditions, not a fixed promise. The conditions that reopen A-lender pricing are consistent: the proposal is completed or discharged; you’ve re-established credit (typically two or more trade lines reporting clean for 12+ months, low utilization); your income and ratios support the file; and enough time has passed since completion — about 2 years after completion, with 2 years of re-established credit (lender- and insurer-dependent).

The rebuild is concrete: open a secured credit card (several banks and issuers offer them) and use it monthly, paying the full balance each cycle; after 6–12 months of clean reporting, add a second trade line so two accounts season at once; keep utilization low. We set a refinance-trigger target when we place your first mortgage, monitor your recovery, and re-shop the moment you qualify for better — the mapped exit is the product, not just the initial approval.

Self-employed and in a consumer proposal

Self-employed borrowers in or after a proposal face two overlapping challenges — the proposal 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 proposal files also offer business-for-self programs that verify income through business bank statements and financials, so a business-for-self borrower isn’t doubly penalized. The file is read on your real income and your equity rather than on line 15000 alone.

Documentation still matters — business financials, bank statements, and evidence you’re current on the proposal — but the combination is very much fundable. See our self-employed mortgage playbook for how we layer business income, and we’ll fit it to the proposal-friendly lenders on the same file.

Which lenders finance a consumer proposal — and in what order?

Think of it as a ladder, and the goal is to climb it. A-lenders sit at the top — prime pricing, insured options — but they generally look for the proposal completed and about 2 years after completion, with 2 years of re-established credit (lender- and insurer-dependent). That’s the destination, not usually the entry point. B-lenders are the workhorses for proposal files: a narrow set of specialty B-lenders will fund during an active proposal, and the pool widens considerably once you’re discharged, at a rate premium over A-lender pricing plus a lender fee.^basis

Private lenders sit at the bottom of the ladder but fund the fastest — they’re equity-based, care less about the proposal itself, and can fund at any stage. CMHC describes private and mortgage-investment-entity lending as short-term credit at higher interest rates, which is why it’s a bridge, not a home.^CMHC With access to 100+ lenders including B and private, we place you on the lowest-cost rung that approves today, then move you up. See the wider alternative lending ladder and our dedicated B-lender page.

What you get

Why Canadians choose Mortgage Squad Advisors.

Active consumer proposal financing via specialty B-lenders and private capital

Discharged proposal: refinance, purchase, or HELOC options widen at B-lenders

Re-establishing 2+ reporting trade lines (12+ months clean) is what moves lenders

Private mortgage option for equity-based files at any proposal stage

Up to ~80% LTV on alt-A; ~65-75% on private (illustrative)*

Lower down payments become possible post-discharge with insurer approval*

A mapped plan back to A-lender pricing as your credit re-establishes

No judgment — a proposal is a financial recovery tool, not a moral failing

Discreet handling — your file and our conversations stay confidential

All lender + broker fees disclosed in writing upfront

How it works

Three simple steps, no pressure.

File snapshot

Date of filing, expected or actual discharge date, and your current re-established credit (trade lines reporting, payment history). We map your options, usually within 24 hours — no bureau pull required to begin.

Match the lender

Active proposal: a specialty B-lender or private capital. Discharged: a wider B-lender pool, and potentially an A-lender once you’re enough months post-discharge with clean re-established credit. We aim for the cheapest path that fits your file.

Plan the path forward

We set a refinance-trigger target and monitor your credit recovery, then re-shop when you cross each milestone — in our experience, many clients can move from B toward A about 2 years after completion, with 2 years of re-established credit (lender- and insurer-dependent).

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FAQ

Common questions, answered.

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Active vs discharged — what’s the difference for lenders?

Active means a much narrower lender list (specialty B-lenders and private). Discharged means the options widen. A-lenders become realistic about 2 years after completion, with 2 years of re-established credit (lender- and insurer-dependent). Discharge alone usually isn’t enough; re-establishing credit is what moves lenders from no to yes.

Can I buy a home with an active consumer proposal?

Often yes, through specialty financing. Expect a higher down payment (commonly ~20–35%), a rate premium over A-lender pricing, and a requirement to show you’re current on your proposal payments.^basis Figures are illustrative and lender-dependent. Many files do better waiting until after discharge if there’s no immediate purchase pressure — we’ll tell you honestly which applies to you.

How much down payment do I need?

It depends on stage and lender, and these are illustrative: active proposal commonly ~20–35%; recently discharged ~10–20%; later, as low as 5% on the first $500,000 (10% on the portion up to $1.5M) for an insured A-lender purchase, once insurer criteria are met. Private files are equity-based, commonly ~25–35% down. Insurer and lender criteria change, so we confirm what’s currently available for your file.

Can I use the FHSA or RRSP Home Buyers’ Plan after a proposal?

Yes. A consumer proposal doesn’t disqualify you; what matters is first-time-buyer status, which for the FHSA generally means you haven’t lived in a home you (or your spouse or partner) owned in the current year or the previous four calendar years.^CRA Building an FHSA during your credit rebuild means your down payment and your credit improve on the same timeline.

Will the proposal stay on my credit report after discharge?

Generally, yes, for a few years. Both Equifax and TransUnion remove a consumer proposal 3 years after you’ve paid off all the debts in it, or 6 years after you signed it, whichever comes first.^FCAC Check your own report to confirm. What matters most to lenders is that it’s completed and that you’ve re-established clean credit.

Is a consumer proposal private, or is there a public record?

It’s confidential in practice but not entirely private. Your employer isn’t notified and it isn’t published in newspapers — but it’s reported to the credit bureaus and your creditors, and it’s recorded in the federal Office of the Superintendent of Bankruptcy’s insolvency registry, which anyone can search for a fee.^OSB Your conversations with us are confidential.

Can I refinance to pay out my proposal early?

Sometimes — if you have enough home equity and a lender comfortable with the active proposal. Settling it early completes the proposal — the 3-year credit-report clock and lenders’ time-since-completion start immediately — and can put you on the path to A-lender pricing faster. But it only makes sense if the math works and it doesn’t drain your equity — we model equity → refinance amount → payout → fees → remaining equity → projected exit before recommending it.

What’s the cost premium on a post-proposal 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 (CMHC describes private and mortgage-investment-entity lending as short-term, higher-rate credit), plus lender and broker fees.^CMHC Refinancing back to A-lender pricing after discharge often saves more over a 5-year term than the premium you pay during recovery. We model the full lifecycle so you see the real number.

How do I re-establish credit during and after a proposal?

Open a secured credit card (several banks and issuers offer them) and use it monthly, paying the full balance every cycle. After 6–12 months of clean reporting, add a second trade line so two accounts season at once, and keep utilization low (ideally under 30%). Consistent clean reporting over a couple of years makes you a substantially more financeable borrower — we coach this on every file.

Does my spouse’s proposal affect me?

Only if you co-borrow. A joint mortgage checks both borrowers’ credit, so a spouse’s proposal affects joint qualification. Where it makes sense, we can structure a single-borrower deal (one name on title and mortgage), which requires the qualifying borrower to carry the file on their own income.

How fast can a proposal mortgage close?

A private file can often fund within days once an appraisal is done and the lawyer is instructed; a B-lender file typically takes a few weeks. Timelines vary by lender and file. If you have a firm closing date, tell us early so we can match a lender that meets it.

What if I had a bankruptcy that became a proposal, or vice versa?

Lenders look at the most recent insolvency event for timing. A bankruptcy converted to a proposal has the proposal as the operative event; a discharged bankruptcy followed by a discharged proposal stacks the recovery timeline. With strong re-establishment, the path back to A-lender pricing still opens — we map the exact timeline on your file. See also mortgage after bankruptcy.

Related products

Mortgage during an active proposal Refinance after a proposal Bad credit mortgage Private mortgage B-lender mortgage Alternative lending (overview)Mortgage after bankruptcy Self-employed mortgage CRA debt mortgage Affordability calculator Guide: how long after a proposal?Guide: active vs discharged Guide: pay off with home equity Guide: rebuild credit Case study: approved 14 months after a proposal Case study: early payout with equity Case study: self-employed + proposal

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. 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. Mortgage Squad Advisors rate desk (internal verification), Illustrative A-lender / B-lender pricing and LTV ranges (reviewed August 2026) — B-lender proposal 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. Financial Consumer Agency of Canada, What's in your credit report (accessed September 2026) — Equifax and TransUnion remove a consumer proposal 3 years after all its debts are paid off, or 6 years after it was signed, whichever comes first.
4. Office of the Superintendent of Bankruptcy (OSB), Government of Canada, Insolvency records — search (accessed September 2026) — Consumer proposals are recorded in the OSB's national insolvency records, which can be searched by anyone for a fee — so a proposal is confidential in practice but not entirely a 'no public record' matter.
5. Office of the Superintendent of Bankruptcy, Consumer proposals (accessed September 2026) — A consumer proposal is filed through a Licensed Insolvency Trustee, and its term cannot exceed five years.
6. Canada Revenue Agency, Opening your FHSAs (Accessed September 2026) — Who qualifies as a first-time home buyer for opening an FHSA, including the current-year-plus-four-previous-years test.
7. Canada Revenue Agency, What is the Home Buyers’ Plan (Accessed September 2026) — The HBP lets you withdraw up to $60,000 from your RRSPs to buy or build a qualifying home.

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