You Can Still Get a Mortgage with Bad Credit

For the year ended December 31, 2013, 118,000 Canadians filed personal bankruptcy or a consumer proposal. Collectively, more than one in eight adult Canadians will either declare bankruptcy or negotiate a debt settlement with creditors.

There are a lot of Canadians with bad credit.

At some point or another, the experts at observe that a majority of people with bad credit will want a mortgage. However, their options are limited. In an effort to prevent a real estate crisis in Canada like the one that ravaged real estate in the U.S., the federal government implemented a number of lending rules to discourage consumers from taking on too much debt and/or from defaulting on their mortgages.

Figures from Statistics Canada show the average ratio of debt-to-disposable income climbed from 150.6% at the end of 2011 to 152% in 2012. It went on to hit a record 164.1% in 2013 and currently hovers above 163%.

Most notably, the government reduced the maximum amortization period for a government-insured mortgage to 25 years and increased the minimum down payment. Home buyers must have a down payment of at least five percent of the home purchase price; previously, no down payment was required.

First-time home buyers with less than 20% of the purchase price of the house for a down payment must get insurance. These changes have made it more difficult for residents to qualify for insured mortgages in Canada.

Getting a mortgage if you have bad credit isn’t impossible. Ultimately, banks want to know how risky it will be to lend you money for your mortgage. There are a number of strategies you can take to get your credit back on track and head towards approval for a mortgage.

For starters, the experts at understand that buying a home with bad credit or after bankruptcy is different than buying a home for the first time. For instance, lenders will want to know how long ago the bankruptcy was discharged or when your consumer proposal was completed. They will also want to know how long you have been re-establishing your credit.

In the past, if you had bad credit or had declared bankruptcy, you were stuck using one of Canada’s big banks or institutions. Fortunately, the financial landscape has changed; there are a lot more lenders out there today, many of whom are willing to finance higher risk and high ratio mortgages.

If you have bad credit and want to step onto the property ladder, contact your nearest mortgage specialist. The licensed agents at can show you how to rebuild your credit and help you find the best mortgage. And unlike Canada’s big banks that only promote their own products, agents are independent—that means they have only your best interests in mind. has access to hundreds of lenders, a large number of which provide mortgages to clients that have filed for bankruptcy or have bruised credit. To find out how you can rebuild your credit score, get approved for a mortgage, and climb onto the property ladder, contact today or apply online and a mortgage specialist will set up an appointment at your earliest convenience.


“Bankruptcy Canada Statistics,” Bankruptcy Canada web site;, last accessed October 6, 2014., article, “Canadians’ household debt burden edges higher in second quarter,” September 15, 2014;

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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