How You Can Get a Mortgage with Bad Credit

Are you thinking of stepping onto the property ladder but afraid that bad credit or a bankruptcy will prevent you from moving into your dream home? While Canada’s big banks might consider those with bad credit to be high-risk, there are many lenders out there willing to work with those who have bad credit—regardless of your payment history.

Can I Get a Mortgage with Bad Credit?

A lot of Canadians have bad credit. That shouldn’t mean you can’t get a mortgage to buy a home. But that’s not how it is with the traditional brick-and-mortar banks in Canada. They see those with poor credit as being a high risk to default on that mortgage—at least until your credit score improves.

Fortunately, the lending environment has changed in Canada. There are lots of options for those with bad credit looking to get a mortgage. To determine what kind of mortgage those with bad credit qualify for, private lenders still consider income, type of employment, down payment, credit profile, if you’re a first time buyer, and other factors.

How Do I Qualify for a Mortgage with Bad Credit?

One of the most important factors lenders look at when considering those with bad credit is your employment and income. Private lenders want to make sure you make enough money to pay for your mortgage.

On top of that, many lenders might require a higher down payment. While someone with excellent credit may only need to come up with a down payment of 5%–10%, those with bad credit may have to put down more.

Keep in mind, the higher the down payment, the better your chances of getting approved for a mortgage . That’s because a higher down payment shows the lender you are able to save and budget.

Keep a Budget in Mind

Your down payment represents a percentage of the value of the home you’re looking at, so it’s important to go into the mortgage and house-hunting process with a price range based on your maximum down payment.

One way to figure this out is to determine your debt-to-income ratio . The higher the ratio, the less likely it is you will be able to meet your monthly obligations. Be sure to factor in all your monthly costs, including condominium fees, property taxes, home insurance, interest charges, and the principal amount of the mortgage.

Potential lenders also look at your total debt-to-income ratio, but they also consider additional monthly payments, such as student loan debt, car payments, and credit cards. Helping Those with Bad Credit Find Their Dream Home

If you have bad credit or have filed for bankruptcy and want to buy your first home, our mortgage brokers can help you both find a mortgage and tell you how you can improve your credit score.

The licensed, independent agents at have access to hundreds of different lenders, many of whom provide mortgages to those with bruised credit or have filed for bankruptcy. To find out how you can get approved for a mortgage and rebuild your credit score, contact today. You can also apply o nline and a mortgage specialist will set up an appointment at your earliest convenience.

Bob Aggarwal

Mr. Aggarwal was one of the original founders of, one of the largest volume Mortgage Brokerage houses in Canada. Mr. Aggarwal has over 12 years of experience in Brokerage and Lending in the small and medium business sector, as well as experience and expertise in the residential housing market. Since the inception of, Mr. Aggarwal has been instrumental in developing the operating platforms, and policies and procedures which have guided the organization to date.


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