Best mortgage lenders for bad credit

For an insured (under-20%-down) mortgage, the floor is 600 — CMHC requires at least one borrower at 600+. That's lower than folklore says. Above 20% down, lenders set their own bars, and B-lenders like Home Trust go all the way to no minimum score on the Classic — pricing the risk instead of refusing it.

The citable rule is Sagen's: discharged (or proposal fully completed) for a minimum of two years, plus two years of re-established credit — that's the insured-mortgage gate. Some doors stay closed longer: Canada Guaranty's stated-income program excludes any prior bankruptcy, and digital lender Nesto declines past bankruptcies and proposals outright. CMHC publishes no waiting period of its own. Practical translation: two clean years of rebuilt credit reopens most of the market; the interim is what B-lenders are for.

B-lender pricing is mostly broker-quoted — Equitable is the exception, publishing its alternative rates openly. For the private tier, the regulator's own data is the honest benchmark: CMHC's industry report puts the top-25 MICs' average single-family rate at 10.5% (Q2 2024), lending at an average 57.8% loan-to-value — equity-based lending at roughly double prime rates, plus lender and broker fees that the report doesn't standardize. Private money is a months-not-years tool.

FCAC's published levers, in order of weight: payment history ("the most important factor" — automate every minimum), credit utilization (keep balances under 30% of limits — FCAC tightened this from the old 35% guidance), account age (don't close your oldest card), and application restraint. There is no official timeline-to-650 — anyone selling you one is guessing. The structural play: take the shortest B-lender term you can carry, rebuild for its duration, and re-qualify at renewal — when switching is penalty-free.

The exit terms — because the entire strategy is leaving. Home Trust's Classic restricts full payout to a bona fide arm's-length sale (or after year three on longer terms): sign a three-year Classic and you may be unable to refinance away to prime in year two, at any penalty. Penalty method matters too — EQB's contract-rate IRD keeps the bridge cheap to exit. Price the contract, not just the rate; the penalty calculator helps.