Quick answer: Yes, many people in BC get a mortgage with bad credit. Banks usually want a credit score of at least about 600 to 680 and a clean recent history. B lenders accept lower scores and past problems if your income and down payment are solid. Private lenders lend mainly on your home's equity. The lower your score, the more equity or down payment you need and the more the mortgage costs, so the goal is to use the right lender now and move back to a bank later.
Missed payments, a collection, a consumer proposal or a bankruptcy can happen to anyone after a job loss, illness, separation or a slow year in business. Here is how lenders actually look at it.
What counts as bad credit for a mortgage?
Lenders look at more than the score. They check:
- your credit score from Equifax and TransUnion;
- late payments in the last two years, especially on rent, a mortgage or a car loan;
- collections, judgments and tax debts;
- a consumer proposal or bankruptcy, and when it was completed or discharged;
- how much of your available credit you use.
A score below about 600 makes an insured mortgage with less than 20% down very hard to get. Recent late payments can matter more than the score itself.
Which lenders work with bad credit?
| Lender type | Who it suits | What to expect |
|---|---|---|
| Banks and credit unions (A lenders) | Minor issues, scores around 600 to 680 or higher, steady income | Best rates, strict rules, insured mortgages with as little as 5% down if you qualify |
| B lenders and trust companies | Past credit problems, self employed or irregular income | Higher rates and usually a lender fee, often around 20% down, terms of one to three years |
| Private lenders | Serious or very recent credit problems, urgent needs | Equity based, short terms, interest only payments, highest costs |
Learn more on our pages about B lenders in BC and private lenders in BC.
How much down payment or equity do you need?
With bad credit, plan for more than the minimum. Many B lenders want around 20% down on a purchase. Private lenders typically lend up to roughly 65% to 75% of the property's value on a first mortgage, depending on the location and property type. If you already own, the same limits apply to your existing equity when you refinance.
What does a bad credit mortgage cost?
Expect a higher interest rate than a bank mortgage, plus fees: B lenders often charge a lender fee, and private mortgages usually include a lender fee, a broker fee, legal costs and an appraisal. Always compare the annual percentage rate, which includes the fees. In BC your broker must give you written disclosure of costs and risks before you sign, and I provide the full APR for every option.
How do you get back to a bank mortgage?
- Pull your credit reports from Equifax and TransUnion for free and dispute any errors.
- Pay every bill on time, including the new mortgage. Twelve to twenty four months of clean history makes a big difference.
- Keep card balances low, ideally under about 30% of each limit.
- Add positive credit with a secured credit card if you have few active accounts.
- Plan the switch at renewal. Many clients move from a private or B lender back to a bank after one or two terms.
Negative items do not stay forever. Most stay on your report for about six years, and a completed consumer proposal is removed three years after you finish it. Our guide to mortgages after a consumer proposal explains that path.
What should you avoid?
- Anyone who promises guaranteed approval or charges large fees before you have a written commitment.
- Credit repair companies that promise to remove accurate information. The Financial Consumer Agency of Canada warns against them.
- Applying with many lenders yourself. Several hard credit checks in a short time can lower your score further.
- Private loans without a clear exit plan.
What are the key takeaways?
- Bad credit narrows your options but rarely closes them.
- B lenders and private lenders work with credit problems, at a higher cost.
- More down payment or equity makes approval easier and cheaper.
- Rebuild for 12 to 24 months and plan your move back to a bank lender.
A single conversation can save you from the wrong lender. Book an appointment or apply online, and I will tell you honestly which lenders fit your situation today.
What other questions do readers ask?
What credit score do I need for a mortgage in BC?
Insured mortgages with less than 20% down need at least one borrower with a score of about 600 or higher under CMHC rules, and many banks want more. B lenders often work with lower scores, and private lenders focus on equity rather than a minimum score.
Will a private lender check my credit?
Most private lenders pull your credit report to understand your situation, but the decision rests mainly on your equity, the property and your plan to repay or refinance.
How much down payment do I need with bad credit?
Expect to need more than the 5% minimum. B lenders commonly want around 20% down, and private lenders often lend up to roughly 65% to 75% of the property value, so you bring the rest.
Should I pay a company to repair my credit?
Be careful. The Financial Consumer Agency of Canada warns that no company can remove accurate negative information from your report. You can request your free credit reports and dispute errors yourself.
Where do these numbers come from?
- CMHC: mortgage loan insurance requirements (minimum credit score 600)
- Financial Consumer Agency of Canada: credit reports and scores
- Financial Consumer Agency of Canada: improving your credit score
- Equifax Canada: how long information stays on your credit report
- FCAC consumer alert: getting help to pay off debt or repair your credit
Published November 5, 2026. This article is general information, not personal financial advice. Rates and programs change, and every approval depends on your full application. Asim Ali is a licensed mortgage broker with Dominion Lending Centres A.I.M.I. Collective Mortgage Group.