Overview
Your credit score is a key factor in qualifying for a mortgage in Canada. Lenders use this score to assess your risk level and determine both your eligibility for a mortgage loan and the interest rate you will be offered. The higher your score, the better your chances of approval and access to the most competitive rates.
Minimum Credit Score Requirements for a Mortgage
Conventional Mortgages (Big Canadian Banks)
- Minimum credit score: 680 is the standard threshold for most traditional lenders, including the Big Six Canadian banks.
- Best mortgage rates: Typically reserved for applicants with a score of 680 or higher. Scores above 760 can access the absolute best rates and terms.
- Score ranges:
- Poor: Below 600 – major banks unlikely to approve, alternative lenders may consider.
- Fair: 620–679 – possible to get approved through some lenders, but with higher rates and stricter terms.
- Good: 680–724 – generally accepted by most lenders, qualifies for better rates.
- Very Good/Excellent: 725 and above – qualifies for the best rates and a wider variety of mortgage products.
Insured Mortgages (High-Ratio, CMHC-Backed)
- As of recent policy changes, the minimum credit score for at least one applicant is 600 for insured (high-ratio) mortgages, but this does not guarantee competitive rates. Applicants with scores below 680 will likely face higher interest rates and more restrictive terms.
Options for Lower Credit Scores
- Credit score 600–679: Some lenders (often credit unions, B-lenders, or alternative lenders) may approve mortgages, but typically at higher interest rates—often 1–2% above prime rates.
- Credit score below 600: Very limited options; typically only accessible through private lenders or specialized "bad credit" mortgage programs, with higher rates and stricter conditions.
- No credit history: Newcomers or those with limited history may need to build credit before qualifying or seek lenders with special newcomer programs.
How Your Credit Score Affects Your Mortgage
- Interest rates: Higher credit scores directly lead to lower mortgage rates, reducing your total borrowing costs.
- Mortgage options: More mortgage products and flexible terms are available to borrowers with higher credit scores.
- Approval odds: Higher scores increase your likelihood of approval, especially with major banks.
- Debt load: Even with a good score, high existing debts can reduce your mortgage borrowing power.
Comparison Table: Credit Score Tiers and Mortgage Options
| Credit Score Range | Likelihood of Mortgage Approval | Typical Lender Type | Interest Rate Range | Notes |
|---|
| 760+ | Very High | Big banks, top lenders | Best/lowest available | Excellent terms |
| 680–759 | High | Big banks, traditional | Competitive to low | Most standard mortgages |
| 620–679 | Moderate | Some banks, B-lenders | Higher than prime | Stricter terms, larger down payment may be required |
| 600–619 | Low | B-lenders, credit unions | Significantly higher | Fewer products, higher costs |
| Below 600 | Rare | Private/alternative lenders | Highest rates, more fees | Last resort, significant conditions |
Provincial Variations
- Credit score requirements are generally consistent across provinces, but some regional lenders may have unique programs or slightly different thresholds.
- Quebec, Ontario, and British Columbia have the largest variety of lenders and alternative options.
- Newcomer programs (e.g., Scotiabank's StartRight) are available nationwide but may have specific eligibility criteria in certain provinces.
Government Programs and First-Time Homebuyer Incentives
- First-Time Home Buyer Incentive: No minimum credit score specified, but qualifying for a mortgage through a lender still requires meeting their score threshold.
- Home Buyers’ Plan (HBP): Allows withdrawal from RRSP for down payment, not tied to credit score.
- GST/HST New Housing Rebate, Land Transfer Tax Rebates: Not credit score dependent, but require mortgage approval.
Major Bank Offerings
- Big Six banks (RBC, TD, Scotiabank, BMO, CIBC, National Bank): Require 680+ for standard mortgages.
- Alternative/B-lenders: Consider applicants with scores as low as 600, sometimes lower, with higher rates and stricter terms.
- Private lenders: May consider scores below 600, but costs and risks are much higher.
Actionable Next Steps and Recommendations
- Check your credit score with Equifax or TransUnion before applying.
- Work on improving your score if below 680: pay debts on time, reduce credit utilization, avoid new credit inquiries.
- Compare mortgage rates and lenders—not all lenders treat credit scores the same way.
- Consider using theratefinder: This platform helps Canadians compare mortgage rates from top lenders and navigate the application process, including options for those with less-than-perfect credit. Start your personalized application at theratefinder.ca/onboarding for tailored solutions.
Summary
- 680 or higher is the standard credit score required to qualify for the best mortgage rates with most Canadian lenders.
- Some lenders will consider applications with scores as low as 600, but expect higher rates and stricter conditions.
- Your credit score not only affects approval odds but also the rates and terms you’ll receive.
- Use platforms like theratefinder to compare your options and find the best mortgage for your credit situation.