Your credit score is one of the first things a mortgage lender checks. It affects which lenders will work with you, the rate you are offered and whether you can get an insured mortgage. This page covers the rules that are set in writing (CMHC’s minimum for insured mortgages) and how lenders generally treat different scores; each lender’s own cut-offs vary and change, so a mortgage broker or lender can tell you where you stand.
The minimum for an insured mortgage
With less than 20% down, a mortgage must carry default insurance, and it can only be insured on a home priced under $1.5 million. For a CMHC-insured purchase, at least one borrower or guarantor needs a credit score of 600 or more; CMHC may use other ways to judge creditworthiness for a borrower with no credit history. (CMHC) Lenders can, and many do, set a higher minimum of their own.
With 20% or more down, the mortgage doesn’t need insurance, and the minimum score is set by the lender. See insured vs uninsured mortgages and the minimum down payment.
How lenders treat different scores
| Lender type | Who they are | How they treat your score |
|---|---|---|
| A lenders | Banks, monoline lenders, most credit unions | Want a strong score and clean history; offer the lowest rates |
| Credit unions | Provincially regulated cooperatives | Often more flexible, with manual underwriting |
| B (alternative) lenders | Trust companies and alternative lenders | Accept lower scores or unusual income, at higher rates and often a lender fee |
| Private lenders and MICs | Individuals and mortgage investment corporations | Lend mainly on the property’s equity, at the highest rates, usually for short terms |
A higher score generally means more lenders competing for you and a lower rate; a lower score narrows your choices and raises the cost. The difference a score makes to your rate, and how to weigh waiting against buying now, is covered in how your credit score affects your mortgage rate. For the lender types, see types of mortgage lenders, B lender mortgages and alternative lenders.
Co-borrowers
CMHC’s minimum applies to at least one borrower, so a couple can qualify for an insured mortgage when only one partner meets it. Each lender decides how it weighs the second borrower’s score, and a weak score can still raise the rate or rule out some lenders. If one partner’s score is much lower, ask a broker whether applying with the stronger partner alone (if their income qualifies) or adding a guarantor works better.
What lenders look at beyond the score
Lenders read the credit report behind the score: late payments, collections, how much of your available credit you use, how long your accounts have been open, recent credit applications, and any bankruptcy or consumer proposal. How long each item stays on your report is covered in how long a bankruptcy stays on your credit and how long a hard inquiry stays on your credit. Your income and debts matter as much as the score; see debt service ratios.
How to check your credit score before applying
You can get your credit report free from both bureaus, Equifax and TransUnion, and several free apps and many banks show a score. Check both bureaus: lenders may use either, and the scores can differ. See Equifax vs TransUnion and how to dispute an error on your report.
Special situations
- Newcomers without a Canadian credit history: CMHC has an insurance option for new residents that can use other evidence of creditworthiness; lenders may also accept foreign credit reports or a larger down payment.
- Self-employed borrowers: income is harder to prove, so a strong score helps; CMHC has a self-employed program.
- After a bankruptcy or consumer proposal: most lenders want to see re-established credit and time since discharge or completion; see rebuilding credit after bankruptcy.
If your score is below the threshold
The right strategy depends on how far below the threshold you sit and how much time you have.
- Just under a lender’s cut-off: lowering the share of your credit limits you use and paying every bill on time are the quickest ways to raise a score; a few months can make a difference. See how to improve your credit score fast and improving your credit score for a mortgage.
- Below CMHC’s 600: a CMHC-insured mortgage isn’t available unless a co-borrower or guarantor meets it (other insurers set their own minimums), so you would need 20% down with an alternative lender, or time to rebuild.
- Using a B or private lender: borrowers often take a short term and aim to move to a regular lender at renewal once their credit improves; compare the extra interest and fees against waiting.
- Collections: deal with them before you apply; an unpaid collection on your report counts against you.
Improving your score
A mortgage application puts more weight on your credit file than almost any other credit decision: the score decides which lenders will consider you, and the report is read line by line during underwriting. This page covers the mortgage-specific side of raising a score, meaning what lenders look at, what can change in the months before you apply, and what to leave alone until closing. It is one of our guides to mortgage lenders and brokers.
How scores are built in general (the five factors and the 300 to 900 range) is explained in credit scores explained, and general score-raising tactics are in how to improve your credit score fast.
Which score a mortgage lender looks at
- One bureau or both. Canada has two credit bureaus, Equifax and TransUnion, and their scores for the same person can differ because not every creditor reports to both. Lenders choose which bureau they pull, and some pull both; ask the lender or broker which one it uses, then check that report first.
- Two applicants. On a joint application each borrower’s file is reviewed. For an insured mortgage, the floor applies to the stronger file: At least one borrower or guarantor has a credit score of 600 or more. Lenders can set their own, higher minimums, and how a lender weighs two different scores is its own policy.
- The score floor and the rest. For a CMHC-insured purchase, at least one borrower or guarantor needs a credit score of 600 or more; CMHC may use other ways to judge creditworthiness for a borrower with no credit history. What different lender types want above that floor is covered in the credit score needed for a mortgage, and how the score changes the rate you’re offered in how your credit score affects your mortgage rate.
- The report, not only the number. Underwriters read payment ratings, collections, public records such as a consumer proposal, and recent inquiries. Each line is explained in how to read your credit report.
Three to six months before you apply
| What to do | Why it matters for the mortgage |
|---|---|
| Get both credit reports | You see what any lender might see, with time to fix it. Ordering your own report is a soft inquiry and doesn’t affect your score. |
| Dispute errors | Accounts that aren’t yours, wrong balances or paid debts shown as unpaid can be disputed with each bureau, and investigations take weeks. |
| Bring card balances down | Balances are reported from your statements, so paying before the statement date lowers what lenders see. Lower balances also lower the minimum payment counted in your TDS ratio. See credit utilization. |
| Deal with collections | An unpaid collection is a common reason for a decline or a condition on approval; paid collections still show for years but read better to an underwriter. |
| Keep every payment on time | A new late payment right before an application weighs more heavily than an old one. Automatic minimum payments prevent accidental misses. |
| Build a thin file | A young borrower or a newcomer to Canada with little history can add a secured card or a small installment loan, but these need months of on-time payments to count. |
A credit card balance affects the application twice: through the score, and through the monthly payment lenders add to your debt ratios. That second effect is worked through in how credit card debt affects mortgage approval.
How long negative items stay
Waiting is the only fix for some items, so it helps to know when they drop off. According to the Financial Consumer Agency of Canada:
| Item | Equifax | TransUnion |
|---|---|---|
| Hard inquiries | 3 years | 6 years |
| Late payments | Up to 6 years | Up to 6 years |
| Consumer proposal | 3 years after it is paid off (or 6 years after signing, whichever comes first) | Same |
| First bankruptcy | 6 years after discharge | 6 years after discharge in most provinces |
Older items count for less than recent ones even before they drop off. Getting approved after an insolvency is covered in a mortgage after a consumer proposal and a mortgage after bankruptcy.
Around the credit check
- Shop rates without a pile of applications. Rate quotes and online estimates usually don’t need a credit check; a pre-approval or a full application usually does. A broker can send one application to the lender most likely to approve it, which is one reason borrowers with a borderline score often use one (see mortgage broker vs bank vs online lender). Canadian bureaus say only that several inquiries for the same kind of credit in a short period may be treated as one, without a fixed window.
- Get pre-approved once your file is ready, not before: a mortgage pre-approval reflects the score on the day of the check.
- The lender may check again before closing. Lenders can re-pull credit or confirm debts before the funds are advanced, so a change between approval and closing can still matter (see the underwriting process).
What can hurt the application before closing
| Step that can hurt the application | Why |
|---|---|
| Opening new credit cards or loans | Adds a hard inquiry and, for a loan, a monthly payment that raises your TDS |
| Closing old cards | Cuts your available credit, which raises your utilization |
| Large purchases on credit (a car, furniture) | Raises reported balances and payments right when the lender rechecks |
| Co-signing for someone else | The co-signed debt can count against your own ratios |
| Missing any payment | A new late payment is the most damaging item a lender can see |
| Changing jobs | Doesn’t touch your score, but can reopen income verification |
A readiness checklist
- Both reports reviewed and any errors disputed.
- No late payments in the last 12 months, and every active account current.
- Card balances low on the statements the lender will see.
- Collections paid or settled, with the letters to prove it.
- No new credit applications planned before closing.
- Your down payment in your account with 90 days of history: see what lenders look for in your bank statements.
If an application has already been declined because of credit, what to do when your mortgage is denied covers the next steps, and mortgage lenders for bad credit lists lenders by credit band.
Your score and your rate
Your credit score helps decide whether a lender will approve your mortgage and at what rate. This page covers what the regulator, the credit bureaus and the federal mortgage insurer say about that link, what a higher rate costs, and how to shop without hurting your score. It is part of the mortgage rates hub; for everything else that goes into a rate, see how mortgage rates are determined.
How lenders use your score
The Financial Consumer Agency of Canada (FCAC) says lenders look at your credit report and score to decide whether to lend to you and how much interest to charge. With no credit history or a poor one, a mortgage can be harder to get; with a good history, you may be able to get a lower rate. Your credit history is one of several factors FCAC lists, alongside the term, the lender’s prime and posted rates, whether you qualify for a discount, the type of rate and whether you’re self-employed.
The score is not the whole decision. Equifax says a credit score is only one criterion a lender uses, and that in mortgage lending the lender also takes into account the property being bought and the owner’s equity. It adds that each lender has its own policies. That is why this page has no table of rates by score: each lender prices scores its own way. You can ask each lender how your score affects the rate it offers you.
Score ranges
FCAC says scores usually range from 300 to 900, and a higher score is better. Equifax notes that scoring models vary and describes the ranges this way:
| Score | How Equifax describes it |
|---|---|
| 760 and up | Excellent |
| 725 to 759 | Very good |
| 660 to 724 | Good; lenders generally see scores in this range and up as acceptable or lower-risk |
| 560 to 659 | Below the good range; may be less likely to qualify for better loan terms |
| Below 560 | Poor; more likely to have difficulty getting credit or qualifying for better loan terms |
FCAC also notes that the score you see may be different from the one a lender sees, because a lender may give more weight to certain information. More on what the numbers mean is in what is a good credit score in Canada.
Your score and an insured mortgage
With less than 20% down you need mortgage loan insurance. The insurer has its own credit requirement. For CMHC: For a CMHC-insured purchase, at least one borrower or guarantor needs a credit score of 600 or more; CMHC may use other ways to judge creditworthiness for a borrower with no credit history. The score lenders and other insurers look for is covered in the credit score needed for a mortgage.
Insurance also changes the rate. In the Bank of Canada’s data for fixed mortgages with terms of 5 years and over that chartered banks funded (including renewals and refinancing) in July 2026, insured loans averaged 4.05% and uninsured loans 4.49%. Why insured loans can be cheaper for a lender is explained in how mortgage rates are determined.
If a bank declines your application, alternative lenders are another route; how they work and what they charge is covered in B-lender mortgages.
What a higher rate costs
FCAC points out that because a mortgage is a large amount of money, small differences in the interest rate can have a significant impact on your costs. Here is how half a percentage point plays out:
On a $400,000 mortgage with a 25-year amortization, a rate of 4.50% means a monthly payment of $2,214, and a rate of 5.00% means $2,326. That is $112 more a month, or $6,720 more in payments over a five-year term. The cost is more than the payment gap, because the higher rate also sends less of each payment to principal: over the five years you would pay $9,564 more in interest and still owe $2,844 more at renewal ($354,030 against $351,186).The payments use semi-annual compounding, the convention for Canadian fixed-rate mortgages. The rates are examples, not offers for any score; to compare your own offers, try the mortgage calculator.
Shopping for a rate without hurting your score
Comparing several lenders is how you find out what your score is worth to each of them. FCAC says checking your own credit report or score doesn’t affect your score. When a lender checks your credit, an inquiry is added to your report, and how often you apply for new credit is one of the factors that affect your score. Equifax adds that most scoring formulas will not penalize you for shopping for the best mortgage rate or car loan, though a flurry of inquiries will prompt most lenders to ask you why. The difference between the two kinds of check is explained in soft vs hard credit checks.
Once you have an offer you like, a rate hold can keep it while you close, and how to get a lower mortgage rate covers comparing and negotiating offers.
Improving your score before you apply
FCAC says your score goes up when you pay bills on time and use credit responsibly, and goes down when you miss payments or have too much debt. Among the factors it lists are carrying a balance on credit cards, being close to or over your credit limit, and how often you apply for new credit. Two steps can help well before you apply:
- Check both credit reports. Canada has two main credit bureaus, Equifax and TransUnion. A mistake on either report can affect your score; how to dispute a credit report error explains the process.
- Lower your card balances. Owing close to your limit counts against you; how to improve your credit score fast covers what tends to move a score and how long it takes.
Whether waiting is worth it depends on how far your score is from what your lender wants and on what else could change while you wait, such as rates or prices.
At renewal
FCAC notes that every time you renew your mortgage term, you renegotiate your interest rate. If your score has improved since you first borrowed, renewal is a chance to ask your lender, and others, for a better rate. Your options at that point are covered in the mortgage renewal guides.
Related pages
- Mortgage lenders for first-time buyers
- The first-time home buyer guide
- How Credit Scores Affect Mortgage Rates
- How Credit Scores Are Calculated in Canada
- How to Improve Your Credit Score for a Mortgage
- Debt Service Ratios (GDS & TDS) Explained
- Alternative Mortgage Lenders in Canada
- Types of Mortgage Lenders in Canada
- B-Lender Mortgage Canada
- Insured vs Uninsured Mortgage
- Big bank vs monoline lender
- Best private mortgage lenders
- Mortgage underwriting process
- Getting a mortgage after a consumer proposal
- Self-employed mortgages
- Mortgages for newcomers and immigrants
- Mortgage investment corporations (MICs)
- Consumer proposal vs bankruptcy
- Mortgage lenders and brokers in Canada
- Mortgage Renewal in Canada
Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and October 29, 2026. How we check facts.
- Bank of Canada: Mortgage rates, fixed 5 years and over: uninsured residential mortgages, funds advanced (data series)
- Bank of Canada: Mortgage rates, fixed 5 years and over: insured residential mortgages, funds advanced (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Conventional 5-year mortgage rate (data series)
- Bank of Canada: Data table
- CMHC: CMHC Purchase
- Department of Finance Canada: Boldest mortgage reforms in decades come into force today
- equifax.ca: What Is a Good Credit Score in Canada? | Equifax CA
- Financial Consumer Agency of Canada: How much you need for a down payment
- Financial Consumer Agency of Canada: How long information stays on your credit report
- Financial Consumer Agency of Canada: Credit report and score basics