Bad Credit Mortgages in Toronto
A credit hiccup isn't the end of the story.
Bruised credit, a consumer proposal, prior bankruptcy, or recent missed payments rule out most banks — but not the broader market. Alternative (B) lenders and private lenders price for the file, and a broker structures a 12–24 month path back to A-lender financing.
Who this is best for
- Buyers or owners with sub-650 credit scores
- Discharged bankrupts or consumer-proposal completers
- Owners with recent late payments or collections
- Borrowers whose credit took a hit due to divorce or illness
How a Toronto mortgage broker helps
- Pulls credit once and shops the file across B and private lenders
- Builds a credit-rebuild plan alongside the mortgage
- Confirms the full cost of borrowing in writing
- Plans a documented exit back to a bank in 12–24 months
What lenders typically look at
- Down payment / equity typically 20%+ for B-lenders
- Property in a marketable Toronto/GTA location
- Sufficient income to service the payment
- Realistic exit strategy
Documents you'll likely need
- Photo ID
- Credit report (broker pulls)
- Income proof
- Down payment / equity confirmation
- Documentation of any prior credit events
A Toronto example
Post-proposal refinance
An owner two years past a discharged consumer proposal with a $480,000 mortgage and 30% equity is reviewed for a B-lender refinance with a 24-month plan back to an A-lender at renewal.
Frequently asked questions
+What credit score do I need?
A-lenders generally want 680+. B-lenders work down into the 500s, and private lenders focus on equity rather than score.
+Can I buy with an active consumer proposal?
Usually not with A-lenders. Some B-lenders consider it once the proposal is paid in full and reported.
+Will I always pay a higher rate?
Only while you're with an alternative lender. The plan is to move back to A-lender pricing at renewal.
+How much down payment do I need?
Typically 20% or more for B and private lenders on a purchase, sometimes higher depending on the file.
Related
This website does not guarantee any mortgage rate, approval, or product. We do not provide mortgage advice on this website. All mortgage transactions are handled by the licensed brokerage identified on this site, in accordance with FSRA requirements.