Can I get a home loan in Canada with bad credit?

Yes, Canadians with bad credit can obtain home loans, but typically not from major banks. Alternative lenders like B lenders and private lenders offer options, often with higher interest rates and stricter conditions.

What is considered bad credit in Canada?

In Canada, a credit score below 560 is generally considered bad credit. Traditional banks usually require scores above 680 for standard mortgages, while some alternative lenders may consider scores as low as 500.

What are the typical interest rates for bad credit mortgages?

Interest rates for bad credit mortgages can vary significantly. For scores below 560, rates can range from 8% to 12% or more, compared to 4.5% to 5.5% for those with scores above 660.

What down payment is required for bad credit home loans?

For bad credit home loans, lenders often require a down payment of 20% or more, compared to 5-10% for conventional mortgages. A larger down payment can help offset lender risk.

How can I improve my chances of getting a bad credit mortgage?

To improve your chances, check your credit report for errors, provide a larger down payment, show stable income, consider a co-signer, and work with a mortgage broker specializing in bad credit solutions.

Are there government programs for first-time homebuyers with bad credit?

Yes, programs like the Home Buyers' Plan (HBP) and First Home Savings Account (FHSA) can assist with down payments for first-time buyers, even those with bad credit, but eligibility varies.

What types of lenders offer bad credit mortgages in Canada?

B lenders and private lenders are the primary options for bad credit mortgages in Canada. Some examples include MCAN Home, Home Trust, and Equitable Bank, each with different credit score requirements.

Do provincial rules affect bad credit mortgage options?

Yes, minimum down payments and lending rules can vary by province. While many alternative lenders operate nationwide, some may not be available in certain provinces like Quebec or Saskatchewan.

bad credit home loans in Canada

✓ Updatedyesterday• 115 views

Information as of Dec 11, 2025

Overview

Canadians with bad credit can still obtain home loans, but not from major banks. Instead, alternative lenders such as B lenders and private lenders offer bad credit mortgages, typically with higher interest rates and stricter conditions. Eligibility, rates, and required down payments vary by lender and province.

Bad Credit Mortgage Basics

What Is Bad Credit?

Credit scores in Canada range from 300 to 900.
Bad credit is generally defined as a score below 560.
Traditional banks require scores above 680 for standard mortgages; most alternative lenders consider applicants with scores as low as 500.

Impact of Bad Credit

Higher interest rates: Expect significantly higher rates than those offered to prime borrowers.
Larger down payment: Often 20% or more is required, compared to 5–10% for conventional mortgages.
Stricter income verification: Stable income is essential, and you may need a co-signer or guarantor in some cases.

Key Lender Options for Bad Credit Mortgages

B Lenders and Private Lenders

Lender	Minimum Credit Score	Availability	OSFI Regulated
MCAN Home	Below 500	Nationwide	Yes
Home Trust	Not disclosed	All provinces	Yes
First National	Below 580	Nationwide	No
Merix Financial	Not disclosed	Nationwide	No
Equitable Bank	Not disclosed	All provinces	Yes
RFA	Below 500	All except Quebec	Yes
CMLS	500	ON, BC, AB, MB, SK	No
B2B Bank	500	All provinces	Yes
Community Trust	500	All provinces	Yes
Pine	500	All except Quebec	No
Strive Capital	540	ON, BC, AB	No
Canadian Mortgages Inc.	No minimum	All except NB, SK	No
Graysbrook Capital	No minimum	ON, NB, NS, PEI, NL	No

Note: Most require applications via a mortgage broker.

Government Programs & Incentives

Home Buyers' Plan (HBP): Withdraw up to $35,000 from RRSP for a down payment. Repayment required over 15 years.
First Home Savings Account (FHSA): Tax-advantaged savings for first-time buyers. Contributions can be used toward a down payment.
These programs help with down payments but do not guarantee loan approval; eligibility depends on credit, income, and lender criteria.

Provincial Differences

Minimum down payments and lending rules may vary by province. Most alternative lenders operate in all provinces, but some are unavailable in Quebec, New Brunswick, or Saskatchewan.
Some provinces have additional support or regional programs for first-time buyers or those with financial challenges.

Tips for Improving Approval Odds

Check your credit report for errors before applying and dispute inaccuracies.
Provide a larger down payment to offset lender risk.
Show stable, verifiable income.
Consider a co-signer or guarantor.
Work with a mortgage broker specializing in bad credit mortgages.

Rate Comparisons

Credit Score Range	Typical Interest Rate (2025)	Down Payment Required
660+	4.5–5.5%	5–10%
560–659	6–8%	10–20%
Below 560	8–12%+	20%+

First-Time Homebuyer Programs

HBP and FHSA provide down payment support, even for those with bad credit.
Provincial grants or rebates may be available (e.g., Ontario’s Land Transfer Tax rebate).
Use these programs to strengthen your application, but lender approval still depends on your credit, income, and down payment.

Actionable Next Steps

Use theratefinder to compare bad credit mortgage rates and lenders across Canada. Their multi-step application connects you with competitive offers from top lenders for residential, commercial, or construction loans.
Start your personalized mortgage application at theratefinder.ca/onboarding/email.
Gather your financial documents, check your credit, and consider boosting your down payment before applying.
Consult a mortgage broker who specializes in bad credit solutions for optimal lender matching.

Summary: Home loans are available in Canada for those with bad credit, but expect higher rates and stricter requirements. Use government programs for down payment support and work with specialized brokers and comparison platforms like theratefinder to find competitive options tailored to your situation. Always check provincial rules and seek professional guidance for the best results.