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Mortgage Squad Advisors
Alternative Lending

Alternative Mortgage Lending in Canada — B-Lenders, Alt-A & Private

When the banks say no, we still have a yes. B-lenders, alt-A, MICs and private capital — the world beyond the Big-6, where flexibility lives — with an exit back to A-lender pricing mapped on every file.

Alternative mortgageB-lenderAlt-AMIC + privateBeacon 500+Exit to A
5-star rated| FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #13737 · Updated August 2026 · Reviewed quarterly; next review November 2026

Big-6 bank turned you down?
We still have lenders who will say yes.
Beyond the Big-6, we work with alternative lenders, credit unions, and private capital. Every fee disclosed in writing before you sign.
We work with A, B and private lenders
A-lender
4.39%
Big-6 + monolines
B / alt-A
5.99%
Home Trust, Equitable
Private
9.49%
MIC + individual
21-35 days
B-lender close
7-14 days
Private close
500+
Beacon accepted (B)
12-24 mo
Exit to A-pricing
Get pre-approved What I qualify for
Maya · AI · 24/7
The bank declined me — what alternatives do I have?
5-star rated| FSRA #13737| 50+ languages

The Big-6 bank you’ve banked with for 15 years has narrow underwriting rules. A single missed credit-card payment, a year of self-employed income, an active CRA balance, or a recent consumer proposal can all trigger an automated decline. The branch employee can’t override the system — and rarely tells you that B-lenders, alt-A monolines, and private capital will fund your file at modest rate premiums. We use the full spectrum and plan your exit back to A-pricing the day we fund.

The short answer

An alternative mortgage is any mortgage outside the big banks (A-lenders) — a regulated B-lender, an alt-A monoline, or a private lender/MIC. It funds files the banks decline (bruised credit, self-employed income, CRA debt, a consumer proposal or discharged bankruptcy) at a modest rate premium, and it's meant to be temporary: the plan is to refinance back to A-lender pricing in 12–24 months.

What is alternative mortgage lending in Canada?

Alternative mortgage lending is mortgage financing outside the Big-6 banks, for borrowers a bank’s rigid rules decline — bruised credit, self-employed or complex income, CRA debt, a consumer proposal or a discharged bankruptcy. It runs in three tiers: regulated B-lenders, alt-A monolines, and private lenders/MICs — each more flexible and costlier than the last, used as a bridge back to A-lender pricing.

What you get

Why Canadians choose Mortgage Squad Advisors.

B-lender approvals as fast as 21-35 days
Stated income, dividend income, retained earnings, contract income — all accepted at the right lender
Beacon scores from 500+ welcome at B-lenders; private is largely Beacon-agnostic
Private mortgages for equity-based files when speed or income story rules out B
CRA debt, active consumer proposal, recent discharged bankruptcy — placed all of them
Refinance, purchase, equity take-out, and bridge — full alt menu
Exit strategy mapped from day 1 — typical refinance to A-pricing in 12-24 months
All lender + broker fees disclosed in writing upfront
30-year amortization available on uninsured alt files (cashflow relief)
We negotiate the margin on every alt deal — saving 25-75 bps is routine
Instant check · no credit pull

Which lenders will approve your credit?

Move the slider to your ballpark credit score — see the lender tier that fits and the realistic rate premium.

Your Beacon score560
450850
Down payment / equity20%
5%50%
Alt-A / B-lender
Lender tier that fits your score
above A pricing, plus a ~1% lender fee
Expected rate premium
43+ specialists
Alternative & private lenders in our 100+ lender network

e.g. Canadian Western Bank, MCAP, RFA Mortgage Corporation, Optimum Mortgage — and more, matched to your file.

Estimates only — a licensed advisor confirms your file. FSRA #13737.

Or ask Maya directly:

Do I qualify for a alternative lending?What documents will I need?How fast can this close?
Maya · 24/7 AI advisor

Question about alternative lending? Maya answers instantly in 50+ languages.

Chat Call
How it works

Three simple steps, no pressure.

1

Honest intake

Tell us what actually happened. Tax debt, missed payments, complex income, recent life events — nothing surprises us. 15-minute conversation, no bureau pull to begin.

2

Match the tool

B-lender vs alt-A vs MIC vs private — based on your equity, income story, urgency, and exit plan. We disclose rate premium, term, fees, and timeline in writing before you commit.

3

Fund + plan the exit

Close the file. Then we monitor your credit recovery and refinance back to A-pricing as soon as your file qualifies — typically 12-24 months. Many clients save more on the exit than they paid in alt premium.

Run the math first

A-lender vs. B-lender vs. private — how the three tiers compare

The whole alternative-lending ladder on one screen. Figures are illustrative and vary by file and market — we confirm your exact rate, fees and terms in writing before you commit.

Comparison of A-lender, B-lender and private mortgages across qualification, rate, speed, equity, best-fit use case and exit strategy.
DimensionA-lender (bank)B-lenderPrivate / MIC
QualificationFull income + strong credit; stress-tested at contract rate + 2% or 5.25%Flexible income (self-employed, commission, stated); Beacon from ~500; some qualify at contract rateEquity-first; credit and income secondary
Typical rateLowest — best-rate marketRoughly 0.5–1.5% above A pricing, plus ~1% lender fee*Higher; CMHC put the private single-family average at 9.6% in Q3 2025*CMHC
SpeedWeeks~21–35 daysAs fast as ~7–14 days
Equity / LTVUp to 95% insured; 80% conventionalUp to ~80%Typically up to ~75–80% (equity-based)
Best forStraightforward salaried files, strong creditBruised credit, self-employed, tight ratios, CRA debt, proposalsSpeed, or files a B-lender won't touch; power-of-sale/foreclosure rescue
Exit strategyRenew or refinance at maturityImprove the file, refinance to A in 12–24 monthsRefinance to B or A as the file heals — never a destination

*Rates and fees are illustrative, move with the market, and vary by file — confirmed in writing before you sign. Private average sourced to CMHC; the A/B ranges are our rate desk’s current read (basis), not a quote.

What is a B lender?

A B lender is a regulated mortgage lender — think Home Trust, Equitable Bank, Haventree, MCAN or Community Trust — that offers mortgages to borrowers the big banks (A lenders) turn away. Where A lenders apply rigid, federally regulated rules, B lenders take a common-sense view of your file: they price for risk and look past a bruised credit history, self-employed income, or a recent life event. B-lender applicants are usually solid borrowers who simply don't tick every box on the A-lender checklist — and a good broker knows which of the B lenders in Canada fits which story. See our dedicated B-lender mortgage page for rates, lenders and how they qualify you.

Alternative mortgages for bad credit

A low Beacon score, collections, a couple of missed payments, or a recent proposal or bankruptcy doesn't have to mean no. B-lenders commonly work down to roughly a 500 credit score on an owner-occupied file with 20% down, and private lenders are largely credit-agnostic because they lend on equity. The premium is real but temporary — the plan is to rebuild and refinance to A-pricing. See our full bad credit mortgage playbook for the credit bands and the rebuild timeline.

Alternative mortgages for the self-employed

If your income is real but doesn't show clean on line 150 — because you write down income, take dividends, retain earnings in a corporation, or earn commission or contract income — an alternative lender is often the answer. Alt-A monolines and B-lenders accept stated income, dividend and retained-earnings income, and one-year self-employment, where a bank wants two clean years of T1s. We layer the income the way the lender actually reads it — see our self-employed mortgage guide.

Alternative mortgages with CRA tax debt

An unpaid CRA balance — personal income tax, HST/GST, or corporate tax — is one of the fastest reasons a bank declines, and it gets worse once CRA registers a lien. Alternative lenders will fund a mortgage that pays out the CRA debt directly, clearing the lien and stopping the interest and collection pressure, then you refinance to A-pricing once you're clean. Time matters here — see our CRA debt mortgage playbook.

Alternative mortgages during or after a consumer proposal

A consumer proposal doesn't lock you out of homeownership. With an active proposal, some B-lenders and most private lenders will lend on equity while you keep up your proposal payments; once the proposal is discharged and you've re-established a little credit, the options widen quickly. Financing can even be structured to pay out the proposal in full and accelerate your recovery. See mortgage after a consumer proposal.

Alternative mortgages after bankruptcy

After a discharged bankruptcy, an alternative lender looks at three things: that the bankruptcy is discharged, that you've begun re-establishing credit, and the equity in the property. With those in place, a B-lender or private mortgage can fund now — you don't have to wait the years an insured A-lender requires — with a clear path back to prime pricing as your re-established credit seasons. See mortgage after bankruptcy.

Using an alternative mortgage to consolidate debt

High-interest debt — credit cards at 20%+, personal loans, a line of credit, or tax debt — is exactly what an equity take-out is built to solve. Rolling it into an alternative mortgage typically drops the blended interest rate sharply and replaces several payments with one, freeing monthly cashflow while your credit recovers. The math has to work, and we model it honestly before recommending it — see debt consolidation.

The exit strategy: your path back to A-lender pricing in 12–24 months

This is the part that separates a plan from a trap. An alternative mortgage is a bridge, not a destination, and we set the exit on day one. Depending on why the bank said no, the exit is timed to a specific milestone: rebuilt credit (a couple of clean tradelines reporting on time), two seasoned Notices of Assessment for a self-employed file, a discharged proposal or bankruptcy, or a cleared CRA balance. We set the refinance-trigger date at funding and monitor your file, so the day you qualify for A-pricing, you move — and many clients save more on that refinance than they paid in alternative premium.

“I had a consumer proposal two years ago and assumed no one would touch me. My advisor never made me feel judged — just helped me find a path forward. We closed in 10 days through a B-lender. They mapped the refinance to A-lender pricing in 18 months as part of the plan from day one.”

— David M., Toronto, ON · B-lender · 10 days · A-exit planned

“Beacon was 580 after a divorce-driven hit to my credit. The team got me a B-lender mortgage to purchase, gave me a credit-rebuild plan, and 16 months later refinanced me to an A-lender at 4.49%. The interim cost was real but the long-term math was worth it.”

— Samantha R., Hamilton, ON · Beacon 580 → A-rate in 16 months

“As someone who's been self-employed for six years, every bank visit felt like a lecture about why I didn't qualify. Mortgage Squad Advisors actually listened, understood how my dividend + salary mix works, and got me approved at an A-lender rate. Saved me $290 a month versus the alt-A quote my bank wanted to push me on.”

— Marcus O., Calgary, AB · A-lender placement · saved $290/mo

“Needed bridge financing to close on a new property before our old one sold. The team set up a private 6-month mortgage that funded in 9 days. Existing home sold a month later and we paid off the private cleanly. No drama.”

— Narinder S., Brampton, ON · Funded in 9 days · 6-mo bridge

Names and identifying details are anonymized to protect client privacy. Each quote reflects a real type of file we have funded; figures are typical results for that kind of file, not a guarantee of your outcome.

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FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

What is an alternative mortgage?
An alternative mortgage is any mortgage arranged outside the big banks (A-lenders). It comes in three tiers: a regulated B-lender (Home Trust, Equitable, Haventree, MCAN, Community Trust, RFA) with relaxed underwriting; an alt-A monoline for complex-but-strong income; and a private lender or MIC that lends on equity. Alternative mortgages fund files a bank declines — bruised credit, self-employed income, CRA debt, a consumer proposal or discharged bankruptcy — at a modest rate premium, and are meant as a temporary bridge back to A-lender pricing.
Why can a B-lender or private lender approve me when my bank can’t?
The Big-6 and other federally regulated (OSFI) A-lenders must apply the mortgage stress test — you have to qualify at the greater of your contract rate + 2% or 5.25%, even though you only pay the lower contract rate. B-lenders and private lenders aren’t bound by that federal stress test, so many qualify you on the actual contract rate and take a common-sense view of bruised credit, self-employed income, or an active CRA balance. That flexibility — plus default-insurance rules that only bind insured A-files — is why an alt lender can say yes on a file the bank’s system auto-declines.
What’s the difference between a B-lender and private?
A B-lender is a regulated, bank-style monoline with relaxed underwriting (Home Trust, Equitable, Haventree, MCAN, Community Trust, RFA); it closes in about 21–35 days at roughly 0.5–1.5% over A-lender pricing plus about a 1% lender fee.basis A private lender is a MIC or individual using asset-based underwriting; it closes in about 7–14 days and priced higher — CMHC put the single-family private average at 9.6% in Q3 2025CMHC — plus lender and broker fees. B is the typical first stop; private is for speed or files B won’t touch. See our private mortgage vs the alternatives guide.
How much equity do I need for an alternative mortgage?
It depends on the tier. B-lenders generally go up to about 80% loan-to-value on an owner-occupied file; private lenders lend mainly on equity and typically up to about 75–80%, so you need meaningful equity remaining after the loan. Lower loan-to-value earns better pricing and more lender choice at every tier. We confirm your exact numbers before recommending an option.
How much does an alternative mortgage cost?
More than a bank, deliberately and temporarily. Illustratively: a B-lender runs roughly 0.5–1.5% above A-lender pricing plus about a 1% lender fee; private pricing averaged 9.6% for single-family files in Q3 2025 per CMHC, plus lender and broker fees (commonly 1–2% each).CMHC Every fee is disclosed in writing before you commit, and the cost is meant to be short-term — the exit to A-pricing is where most of it is won back.
How fast can a B-lender close?
21-35 days on a clean file — almost as fast as an A-lender. Documents are similar to A: property docs, income docs, ID, mortgage statement. Most B-lenders have full electronic intake and won’t require an in-branch visit.
Are alternative rates negotiable?
Yes. Margins exist at every alt lender. We negotiate based on file strength, LTV, beacon, and competing offers. Typical savings: 25-75 bps off list, plus negotiated lender fee reductions on private deals.
Will I be in alternative lending forever?
Goal: 12-24 months. Most clients refinance back to A-lender pricing as credit, income, or proposal-discharge milestones are reached. We set the refinance trigger date at funding and monitor your file proactively.
Can I do a 30-year amortization on alternative?
Yes — most alt-A and private lenders allow 30-year amortization on uninsured files. Lowers monthly payments and improves cashflow during the alt period. Once you refinance to A-pricing, you can revert to 25 years or stay at 30 with most A-lenders.
What about CRA debt?
Mortgages can be used to pay out CRA personal income tax, HST/GST, or corporate tax debt — see our CRA debt mortgage playbook for the full approach. Critical to handle quickly: once CRA registers a lien, your refinance options narrow dramatically.
Are there fees on alt-lending mortgages?
B-lender: lender pays us, no broker fee to you in most cases (a few specialty B-lender programs carry a 0.5-1% broker fee, always disclosed in writing). Private: lender fee + broker fee (typically 1-2% each), disclosed upfront and deducted from advance with your written consent only.
What’s the worst-case scenario on an alt mortgage?
If you can’t refinance back to A within the term and your alt lender won’t renew, we arrange another alt deal at the most competitive rate available. If your equity erodes badly, we’ll recommend selling rather than over-extending. We never let a client surprise-default.
Will alternative lending damage my credit?
B-lender mortgages report on your credit bureau like any other mortgage — paying on time builds credit. Some private mortgages don’t report at all (neither helping nor hurting). We disclose reporting practice for every lender so you can plan your credit recovery.
Can I qualify for alt lending if I’m newly self-employed?
Yes — most alt-A lenders accept 1-year self-employment with a clean income story, or stated income. Private lenders care primarily about equity. See our self-employed mortgage guide for the full BFS playbook.

Related products

B-lender mortgageBad credit mortgageSelf-employed mortgagePrivate mortgageCRA debt mortgageConsumer proposal mortgageMortgage after bankruptcyDebt consolidationJudgments & liensProperty tax arrearsStop power of saleStop foreclosureA lender vs B lenderGuide: what is an alternative mortgageGuide: A vs B vs privateGuide: refinance from a B-lenderGuide: what it costs

Related guides

Go deeper on this topic.

7 Reasons a Mortgage Gets Declined in Canada (and What to Do Next) (2026)A-Lender vs B-Lender vs Private Mortgage: 6 Factors That Decide Where You Fit (2026)

Sources & references

Figures on this page are sourced below and re-checked each quarter. Rates, insurer rules and lender policies change — confirm anything you plan to act on with a licensed advisor.

  1. 1. Canada Mortgage and Housing Corporation (CMHC), Residential Mortgage Industry Report (Q3 2025) — Average interest rate on single-family private mortgages was approximately 9.6% in Q3 2025.
  2. 2. Mortgage Squad Advisors rate desk (internal verification), Illustrative A-lender and B-lender pricing ranges (reviewed August 2026) — B-lender rates typically run roughly 0.5–1.5% above A-lender pricing, plus about a 1% lender fee; ranges are illustrative, move with the market and vary by file — not a quote. Live A-lender pricing is on our rates page.

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