Bad Credit Mortgages
in Canada
Declined by your bank for bad credit? Private lenders approve based on the equity in your home, not your credit score. Bankruptcies, consumer proposals, collections, and CRA arrears are not automatic deal-breakers.
The Problem
Why Banks Decline Bad Credit Mortgages
Canadian banks use credit score as a hard gate. If your score is below roughly 600, most mortgage programs automatically decline you, even if you have significant equity in your home. Past bankruptcies stay on your bureau for 6 years and consumer proposals for 3 years after discharge, which effectively locks most borrowers out of bank financing during that window.
Collections, judgments, CRA tax arrears, and even one missed mortgage payment in the last 12 months can all trigger a bank decline. The federal stress test adds another 2% cushion on top of everything, making it even harder to qualify.
Common Bank Roadblocks
- Banks use credit score as a hard gate - below 600 is usually an automatic decline
- Past bankruptcies stay on your bureau for 6 years and disqualify most bank programs
- Consumer proposals must be discharged plus 2 years of re-established credit
- Collections, judgments, and CRA arrears trigger automatic bank declines
- Even one missed payment in the last 12 months can tank a bank application
- The federal stress test adds a 2% cushion on top of any approval
The Solution
How to Get a Mortgage with Bad Credit in Canada
Private lenders in Canada focus on your property's equity, not your credit score. If you have enough equity (usually a combined loan-to-value under 80 to 85%), you can access financing even with severely damaged credit, recent bankruptcies, or active consumer proposals.
The goal is simple: use a short-term private mortgage (12 to 24 months) to solve your immediate need, then rebuild your credit during the term. Most of our bad credit clients see their scores climb enough to refinance back to a bank within the first year.
Private mortgages also solve CRA tax arrears and property tax arrears - we can wrap those into the new mortgage so you clear them in one transaction.
How We Approve You
- Equity-based approval. We focus on your property, not your credit score.
- Past bankruptcies, consumer proposals, and collections are not automatic deal-breakers.
- CRA tax arrears and property tax arrears can be handled as part of the refinance.
- Most approvals within 24 hours. Funding within 5 to 7 business days.
- Clear exit strategy built in - typically 12 to 24 months to rebuild credit.
- Refinance back to a bank once your credit is re-established.
Our Process
How It Works for Bad Credit Borrowers
Free Consultation
Tell us about your credit situation and property. We assess your options in minutes, no credit pull required.
Simple Application
Minimal paperwork. No income verification. We do not need perfect credit to get started.
Property Appraisal
An independent appraiser confirms your property value. Rush appraisals available for urgent files.
Lender Matching
We shop your file to 50+ private lenders across Canada to find the best rate for your situation.
Approval & Funding
Most approvals within 24 hours. Funding within 5 to 7 business days, even with bad credit.
A Private Mortgage Is a Bridge, Not a Destination
Most of our bad credit clients refinance back to a traditional bank within 12 to 24 months. We build the exit strategy into your file from day one so you are never stuck in a private mortgage longer than you need to be.
FAQs
Bad Credit Mortgage Questions
Yes. Private lenders in Canada approve mortgages primarily based on your property's equity, not your credit score. Past bankruptcies, consumer proposals, collections, judgments, and CRA tax arrears are not automatic disqualifiers. If you have enough equity in your home (typically a combined loan-to-value under 80 to 85%) and a reasonable exit strategy, you can almost always find a private mortgage solution.
The path is usually: (1) rule out A-lenders (banks) because they use credit scores as a hard gate, (2) try B-lenders (alternative banks) who are more flexible, and (3) go to private lenders if B-lenders cannot help. A broker can shop all three channels in parallel to save time. Private mortgages typically fund within 5 to 7 business days, even with bad credit.
There is no minimum credit score for a private mortgage in Canada. Private lenders care about your property's value and the loan-to-value ratio, not your Equifax or TransUnion score. We have closed deals for clients with scores under 500 and for clients coming out of bankruptcy or consumer proposal.
With bad credit, most private lenders in Canada will lend up to 75 to 80% of your property's appraised value for a first mortgage. For a second mortgage, combined loan-to-value can go up to 85% in strong markets. The lower your LTV, the better the rate you will get, regardless of your credit score.
Private mortgage rates for bad credit borrowers in Canada typically range from 6.95% to 12.99%. First mortgages with strong equity (lower LTV) get better rates. Second mortgages and higher-LTV files carry higher rates. Rates are higher than bank mortgages but provide access to financing when banks say no - usually as a 12 to 24 month bridge to rebuild credit and refinance back to a bank.
Yes. Private lenders routinely approve borrowers with recent bankruptcies or consumer proposals, even if they are still active. Traditional banks require 2 years of re-established credit after discharge before they will consider you. A private mortgage can bridge that gap and give you time to rebuild your credit before refinancing back to a bank.
Yes. Successful payments on a private mortgage report to the credit bureaus and help rebuild your credit over time. Combined with paying down other debts and using a secured credit card responsibly, most of our bad credit clients see their scores climb enough to refinance back to a bank within 12 to 24 months.
Yes. We arrange bad credit mortgages across Ontario, Alberta, and Manitoba, including Toronto, Ottawa, Hamilton, Mississauga, Calgary, Edmonton, Red Deer, Winnipeg, Brandon, and Selkirk. Our lender network covers urban, suburban, and rural properties.
Bad Credit? We'll Still Get You Approved.
No minimum credit score. Most approvals within 24 hours. We work with 50+ private lenders across Canada.