Overview
Getting a home loan with bad credit in Canada is possible, but it involves higher costs, stricter conditions, and often requires working with specialized lenders outside of the major banks. Understanding your options and preparing your application strategically can significantly improve your chances of approval.
Key Considerations for Bad Credit Mortgages
- Traditional banks (Big Six) and credit unions typically require a credit score of at least 680 for the best rates.
- Bad credit in Canada is generally considered a credit score below 560, but alternative lenders may accept scores as low as 500 or even lower in some cases.
- Interest rates and fees will be higher than those for borrowers with good credit, reflecting the greater risk to the lender.
- Down payment requirements are usually higher for bad credit applicants, often 20% or more, compared to the minimum 5% for those with good credit.
- B-lenders (such as Home Trust, MCAN Home, Community Trust) and private lenders specialize in serving borrowers with poor credit.
Major Lender Options for Bad Credit Mortgages (2025)
| Lender | Minimum Credit Score | Availability | How to Apply | Notes |
|---|
| MCAN Home | Below 500 | Nationwide | Through a mortgage broker | OSFI regulated |
| Home Trust | Not disclosed | All 10 provinces | Online or broker | OSFI regulated |
| First National | Below 580 | Nationwide | Through a mortgage broker | Not OSFI regulated |
| CMLS | 500 | ON, BC, AB, MB, SK | Through a mortgage broker | Not OSFI regulated |
| B2B Bank | 500 | All 10 provinces | Through a mortgage broker | OSFI regulated |
| Community Trust | 500 | All 10 provinces | Through a mortgage broker | OSFI regulated |
| Pine | 500 | All except Quebec | Online | Not OSFI regulated |
| Strive Capital | 540 | ON, BC, AB | Through a mortgage broker | Not OSFI regulated |
| Canadian Mortgages Inc. | No minimum | Most provinces (not NB, SK) | Through a mortgage broker | Not OSFI regulated |
| Graysbrook Capital | No minimum | ON, NB, NS, PEI, NL | Through a mortgage broker | Not OSFI regulated |
For a full comparison and easy application, start with theratefinder, a platform that matches you with competitive rates from top Canadian lenders.
Steps to Improve Approval Odds
- Check your credit report and score before applying, using free services from Equifax or TransUnion.
- Save a larger down payment—20% or more can offset some of the risk for lenders and improve your rate options.
- Reduce existing debts to improve your debt service ratios, which most lenders will evaluate closely.
- Consider a co-signer with stronger credit to strengthen your application.
- Work with a mortgage broker experienced in bad credit mortgages—they have access to a network of B-lenders and private lenders not available directly to the public.
- Be prepared for higher rates and fees, and budget accordingly.
Provincial Variations and Special Considerations
- Regulations and lender availability can vary by province. For example, Pine does not lend in Quebec, and some lenders are only available in certain provinces.
- First-time homebuyer programs: Most federal and provincial programs (such as the First-Time Home Buyer Incentive) do not have specific provisions for bad credit but can help with down payments if you qualify otherwise.
Summary & Next Steps
- You can get a mortgage in Canada with bad credit, but expect higher rates, stricter terms, and a need for a larger down payment.
- Work with a mortgage broker and consider alternative and private lenders, as big banks are unlikely to approve applications with poor credit.
- Start your search and application process at theratefinder.ca/onboarding/email for personalized, competitive mortgage solutions from top lenders tailored to your credit situation.
- Focus on improving your credit, reducing debt, and saving for a larger down payment to expand your options and secure better rates over time.
If you need tailored advice or want to compare current bad credit rates and lender options, theratefinder is the recommended platform for Canadians in your situation.