What Is a B-Lender Mortgage?
| Feature |
A-Lender |
B-Lender |
Private Lender |
| Examples |
Big 5, monolines |
Equitable, Home Trust |
Individual investors |
| Rate range |
4.00-5.00% |
4.50-6.50% |
7.00-15.00% |
| Credit score |
680+ |
550-680 |
Any |
| Down payment |
5-20% |
10-20% |
20-35% |
| Income docs |
Full T4/T1 |
Flexible |
Minimal |
| Stress test |
BoC + 2% |
BoC + 2% (most) |
None |
| Lender fee |
None |
0.5-1% |
1-3% |
| Mortgage insurance |
CMHC available |
Some qualify |
Not available |
Top B-Lenders Canada
| Lender |
Speciality |
Min Credit |
Min Down |
Rate Premium |
| Equitable Bank |
Self-employed, newcomers |
550 |
10% |
+0.5-1.5% |
| Home Trust |
Self-employed, non-standard |
550 |
10% |
+0.5-1.5% |
| ICICI Bank Canada |
Newcomers, stated income |
600 |
10% |
+0.5-1.0% |
| Bridgewater Bank |
Alberta focused |
550 |
10% |
+0.5-1.5% |
| CMLS Financial |
Broad alternative |
600 |
10% |
+0.5-1.0% |
| Credit unions |
Varies (local) |
550+ |
5-20% |
+0-1.0% |
Who Uses B-Lender Mortgages
| Situation |
Why B-Lender |
| Credit score 550-680 |
Below A-lender threshold |
| Self-employed (stated income) |
Can’t fully document income |
| Newcomer to Canada (<2 years) |
Limited credit history |
| Recent bankruptcy/proposal |
Too soon for A-lender |
| High debt ratios |
Exceed 39%/44% GDS/TDS |
| Non-traditional income |
Tips, commission, rental income |
| Property type issues |
Rural, multi-unit, unique properties |
B-Lender Rate Comparison
| Scenario |
A-Lender Rate |
B-Lender Rate |
Monthly Difference ($400K) |
| Good credit, documented income |
4.50% |
N/A (use A-lender) |
— |
| Credit score 650 |
Declined |
5.25% |
Qualifies at $2,395/mo |
| Self-employed, stated income |
Declined |
5.50% |
Qualifies at $2,449/mo |
| Recent consumer proposal |
Declined |
5.75% |
Qualifies at $2,503/mo |
| New to Canada, large down |
Declined (some) |
5.00% |
Qualifies at $2,338/mo |
B-Lender Costs
| Cost |
Amount |
Details |
| Higher interest rate |
+0.5-2.0% |
Primary additional cost |
| Lender fee |
0.5-1.0% of mortgage |
$2,000-5,000 on $500K mortgage |
| Broker fee (sometimes) |
0-1.0% |
May be higher than A-lender deals |
| Appraisal |
$300-500 |
Usually required |
| Legal fees |
$1,000-1,500 |
Standard |
Total Additional Cost Example ($400K Mortgage)
| Comparison |
A-Lender (4.50%) |
B-Lender (5.50%) |
| Monthly payment |
$2,199 |
$2,449 |
| Extra per month |
— |
+$250 |
| Lender fee |
$0 |
$2,000-4,000 |
| Year 1 extra cost |
— |
~$5,000-7,000 |
| 5-year extra cost |
— |
~$15,000-19,000 |
B-Lender to A-Lender Strategy
Many borrowers use B-lenders as a stepping stone:
| Timeline |
Action |
Goal |
| Year 0 |
Get B-lender mortgage |
Buy the home |
| Years 1-2 |
Improve credit score |
Pay bills on time, reduce debt |
| Years 1-2 |
Document income properly |
File taxes, build 2-year history |
| Year 2-3 |
Refinance to A-lender |
Save 0.5-2% on rate |
Key: Choose a B-lender with reasonable prepayment terms and no harsh penalties so you can refinance when ready.
How to Get a B-Lender Mortgage
| Step |
Action |
| 1 |
Contact a mortgage broker (essential for B-lender access) |
| 2 |
Explain your situation and provide documents |
| 3 |
Broker matches you with best B-lender |
| 4 |
Submit application + supporting docs |
| 5 |
Appraisal ordered |
| 6 |
Approval (usually faster than A-lender) |
| 7 |
Close the mortgage |
Important: Most B-lenders only work through mortgage brokers, not directly with borrowers.