Why banks decline
Institutional lenders apply hard cutoffs: a minimum beacon score, no recent mortgage arrears, a clean payment history, and stress-test qualification on provable income. Miss any one and the file is declined regardless of how much equity you hold. Alternative and private lenders do not use those cutoffs.
Situations we place regularly
None of these are unusual, and none of them are automatic declines outside the banks.
- Beacon score below the bank minimum, or too little Canadian credit history
- Discharged bankruptcy or an active or completed consumer proposal
- Collections, judgments, or CRA arrears registered against you
- Mortgage or property tax arrears, or an active power of sale
- Self-employed income that does not show on a tax return
What it costs and why
Alternative lenders price modestly above bank rates and charge a lender fee. Private mortgages cost more again, with a fee typically expressed as a percentage of the loan. You are paying for speed and flexibility on a short-term basis, not signing up for twenty-five years. The right question is not whether the rate is higher - it is what the total cost is over the twelve to twenty-four months you actually need it.
The exit plan matters more than the rate
We do not place a bad credit mortgage without mapping the way out: which balances to clear, which accounts to keep reporting, what your score needs to reach, and when to reapply. Handled properly, most clients requalify with an alternative or A lender at renewal.
Frequently asked questions
- Can I get a mortgage in Toronto with bad credit?
- Yes. Alternative and private lenders approve based mainly on the equity in the property and a credible exit plan rather than your credit score. Rates and fees are higher than bank pricing.
- What credit score do I need for a mortgage in Ontario?
- Most banks look for roughly 650 or higher. Alternative lenders work well below that, and private lenders will fund with no score requirement when there is sufficient equity.
- Can I get a mortgage after bankruptcy in Toronto?
- Yes. Some alternative lenders will lend shortly after discharge with re-established credit, and private lenders will lend even before that when the equity supports it.
- How much down payment do I need with bad credit?
- For a purchase, typically 20% or more since default insurance is not available on impaired credit. For a refinance, expect a ceiling around 75% to 85% of the appraised value.
- How long until I can get a normal mortgage again?
- Most clients move back to an alternative or bank lender within 12 to 24 months when they follow the credit repair plan we set out at funding.