Bad Credit Mortgage — no judgment, real solutions.

Why equity matters more than your credit score on these files

On A-lender files, credit score and income ratios drive the decision. On alternative and private files, equity does. A B-lender will look at a 520 score very differently with 20% down versus 35% down — the larger cushion gives the lender room if anything goes wrong, so weaker credit becomes underwritable. Private lenders take this further: they lend against the property first and the borrower second^Ratehub.

The loan-to-value reality follows from this. Insured financing allows as little as 5% down^CMHC, but any down payment under 20% requires mortgage loan insurance^FCAC — and insurers apply the credit rules described below. On B-lender deals, expect up to about 80% LTV with a minimum 20% down^nesto; OSFI additionally expects federally regulated lenders to cap non-conforming residential mortgages at 65% LTV or less^OSFI. Private first mortgages typically land in the 65–75% range on our files^{our data}, and across the industry private lenders averaged 58.0% loan-to-value on single-family lending in Q3 2025^CMHC. The equation is simple and honest: the less the lender can rely on your score, the more they rely on your skin in the deal.

What does a bad credit mortgage actually cost in Toronto and the GTA?

Non-prime money costs more, and we put every number in writing before you commit. On the B-lender side, expect pricing above comparable A-lender rates plus a lender fee — commonly 1% of the mortgage amount^WOWA — on a term of three months to three years^nesto. On the private side there is a hard published number to work from: mortgage investment entities charged an average interest rate of 9.6% on single-family lending in Q3 2025, down from 10.4% two years earlier^CMHC.

Private deals also carry fees. Set-up and broker fees together commonly total 1–3% of the loan amount, and on a private file you pay the broker directly rather than the lender paying us^Ratehub — plus legal and appraisal costs. We disclose all of it in writing up front, because the worst thing we can do is surprise you at signing. These are typical ranges, not a live quote: your actual pricing depends on equity, income, and the lender we match you to. The cost is real, but it buys you something specific — ownership now, instead of years on the sidelines waiting for a bank to say yes.

Bad credit mortgages in Toronto and the GTA: what the local market looks like

Alternative lending is not a fringe corner of the Ontario market — it is a structural part of it. FSRA, the provincial regulator, counted 65,233 private residential mortgages worth $32.0 billion in Ontario in 2024, which is 15.8% of every mortgage registered in the province by count and 12.5% by dollar value, against a provincial total of 414,082 mortgages worth $256.0 billion^FSRA. Roughly one in six Ontario mortgages last year was private. If you are being told your situation is unusual, the provincial data says otherwise.

What that means practically in Toronto and the GTA is choice. High GTA property values mean a homeowner with a bruised score often holds enough equity to sit comfortably inside a private lender's 65–75% comfort zone, which is the single biggest factor in getting approved and in what you pay^{our data}. It also means competition among private lenders and MICs concentrated in the GTA, so a file that would be a take-it-or-leave-it offer in a thinner market can usually be shopped.

The trade-offs are local too. GTA closing timelines are typically 30 to 60 days on a resale purchase, and a private lender funding in 7 to 14 days can be the difference between holding a firm deal and losing a deposit^{our data}. On the caution side, FSRA has kept private mortgage brokering as a supervisory priority precisely because borrowers in this tier are vulnerable^FSRA — and CMHC's data shows the 90+ day delinquency rate on private lending reaching 1.96%, the fastest-rising of any lender type^CMHC. Which is exactly why we treat a private mortgage as a bridge with a dated exit, never as a destination.

How do you get back to A-lender pricing — the recovery plan?

This is the part most brokers skip, and it is where we earn our keep. A B or private mortgage is a bridge, not a home. From day one we map your exit. Step one is getting you funded now on the right alternative product. Step two is re-establishing credit deliberately: two clean tradelines — a secured card and a small installment loan work well — reported on time every month, with credit utilization kept under 30% of your total limit, which is the level the Financial Consumer Agency of Canada advises^FCAC. Lenders read heavy utilization as risk even when you pay the balance in full each month^FCAC.

Step three is the refinance, and the timeline is set by the rules rather than by optimism. If you are coming out of a bankruptcy or consumer proposal and need insured financing, insurers require two years since discharge or fulfilment and two years of re-established credit^Sagen — so 24 months is the realistic floor, not a stretch goal. With 20% or more equity you are in uninsured territory, where the lender sets its own credit rules and a strong file can move sooner. In practice most of our clients refinance into A-lender pricing in 12 to 24 months^{our data}, and the savings on that refinance often exceed what they paid in premium over the bridge. We monitor your credit through the term so we can act the moment you qualify — your A-lender exit is mapped, not hoped for.

Bankruptcy, consumer proposals, collections and self-employment

Specific situations need specific answers, and we have placed all of them. Post-bankruptcy: for insured financing, insurers require a minimum two years since discharge plus a minimum two years of re-established credit^Sagen; B-lenders and private lenders set their own rules and are frequently shorter, particularly where equity is strong^{our data}. Consumer proposal: there are specialty paths even while a proposal is active and current, and options widen sharply once it is paid out and discharged — the same two-year insurer clock runs from the date you fulfil the terms^Sagen. Collections: outstanding collections usually need to be paid or explained, but they rarely sink an otherwise solid, equity-supported file.

Missed payments are weighed by recency — lates in the last 12 months hurt most, and we disclose every one rather than let an underwriter find it. Self-employed with bruised credit is our home turf: we document income through bank statements and notices of assessment instead of relying on a tidy T4, and B-lenders are built for exactly this file. Newcomers building Canadian credit get a parallel plan to establish tradelines fast. No judgment, and we work in 50+ languages so nothing gets lost in translation. If your situation is on this list, start with our consumer proposal or private lender pages for the detail specific to it.