Mortgages
What Credit Score Do You Need for a Mortgage in Canada?
For an insured mortgage with less than 20% down, CMHC requires at least one borrower to have a credit score of 600 or more. What lenders look for beyond the score, and what to do if yours is lower.
What is the minimum credit score for a mortgage in Canada?
For a mortgage insured by CMHC (required when you put down less than 20%), at least one borrower or guarantor must have a credit score of at least 600.
Lenders set their own requirements on top of the insurer’s, and many look for higher scores for their best rates. Uninsured mortgages, with 20% or more down, follow each lender’s own policy.
Put it into practiceHow mortgages workWhat credit score gets the best mortgage rate?
There is no single cut-off, but borrowers with scores in the high 600s and above usually qualify for mainstream lenders’ posted and discounted rates. Lower scores may still qualify, with fewer lender choices or a higher rate.
What else do lenders look at?
Your income and how stable it is, your debts, your down payment, and your debt service ratios. For CMHC-insured mortgages, the maximum ratios are 39% of gross income for housing costs (GDS) and 44% for all debts (TDS).
You must also pass the mortgage stress test, which checks that you could afford payments at a higher rate than the one you sign.
Can I get a mortgage with bad credit?
Sometimes, through alternative lenders, credit unions or private lenders, usually at higher rates and fees and often with a larger down payment. A mortgage broker can compare these options.
If you can wait, a few months of on-time payments and lower card balances can raise your score enough to qualify with a mainstream lender, which can save far more than the delay costs.
How can I raise my score before applying?
Pay every bill on time, bring card balances under 30% of their limits, avoid applying for new credit in the months before, and check both Equifax and TransUnion for errors.
Keep reading
MortgagesThe Mortgage Stress Test in CanadaWhat the stress test is, how the qualifying rate is set, how it affects how much you can borrow, and when it doesn’t apply.
Credit scoresHow to Improve Your Credit Score in CanadaNine steps that raise a Canadian credit score, in order of impact, with how long each takes to show up.
MortgagesDown Payments and CMHC Mortgage Insurance in CanadaThe minimum down payment for any price, what CMHC insurance costs with less than 20% down, and where your down payment can come from.
MortgagesHow Mortgages Work in CanadaWhat a mortgage is, the difference between term and amortization, how payments are calculated and what else you pay when you buy.
Official sources and further reading
Terms vary by product. Confirm the provider’s current terms before acting. This guide does not predict approval, realized value or credit-score changes. How WalletReturn calculates value