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How Your Credit Score Affects Your Mortgage Rate in Canada

Updated

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:

ScoreHow Equifax describes it
760 and upExcellent
725 to 759Very good
660 to 724Good; lenders generally see scores in this range and up as acceptable or lower-risk
560 to 659Below the good range; may be less likely to qualify for better loan terms
Below 560Poor; 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:

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.

Sources

The figures and rules on this page come from these sources, last checked against them between September 29, 2026 and October 2, 2026. How we check facts.