What Credit Score Do You Need to Qualify for a Mortgage in Canada?

What credit score do you really need to qualify for a mortgage? It’s a key question for anyone getting ready to buy a home. In Canada, credit scores are grouped into ranges, and each tier can impact your chances of approval, how much you can borrow, and the interest rate you’ll receive. This is important because lenders use your score to determine what type of mortgage you qualify for—whether it’s a conventional mortgage, insured mortgage, or a mortgage from a private lender.

In this article, we’ll help you understand the minimum requirements and explain how your credit score influences your borrowing power.

Understanding Credit Score Tiers in Canada

Understanding your credit score and how it impacts your borrowing power is an important first step when preparing to buy a home. Your credit score is a three-digit number between 300 and 900 that lenders use to help determine how financially reliable and responsible you are. It’s calculated by credit bureaus using something called the FICO formula, which looks at the information in your credit report—things like your payment history, how much debt you carry, and how long you’ve had credit. 

The higher your score, the better your chances of getting approved, a lower interest rate, and qualifying for a bigger loan. Most Canadians fall somewhere in the middle, but even if your score isn’t perfect, you may still have options depending on where you fall within the credit score tiers. Canada has two main credit bureaus—Equifax and TransUnion—and each may categorize credit score ranges differently. Equifax categorizes credit scores into the following ranges. While these groupings come from Equifax, the potential impact on mortgage approval chances is based on general lending practices, not Equifax’s criteria.

Minimum Credit Score Requirements by Mortgage Type

• Conventional mortgages

These are standard mortgages offered by most major banks and credit unions, such as RBC, TD, Scotiabank, BMO, CIBC, National Bank of Canada, MCAP, RMG, and Merix. These lenders usually require a credit score of 680 or higher and have strict criteria that must be met. Conventional mortgages typically need a down payment of at least 20% and don’t require mortgage insurance, making them a popular choice for buyers with strong credit. 

• Insured mortgages (CMHC)

If you’re buying a home with less than a 20% down payment—sometimes as little as 5%—you’ll be required to have that mortgage insured by the Canada Mortgage and Housing Corporation (CMHC). This type of mortgage doesn't come directly from CMHC but instead, it comes from a conventional lender such as a major bank or credit union. It is then insured by CMHC or other private insurers based on certain requirements. This insurance protects the lender in case you default on your loan. 

Because of this protection, lenders are more willing to offer mortgages to buyers with credit scores as low as around 600. While you don’t need a 20% down payment for these loans, keep in mind that you will have to pay mortgage insurance premiums as part of your mortgage costs.

• Private lenders

Private lenders (also known as B lenders) are financial institutions that offer more flexible mortgage options to those who don’t meet standard borrowing requirements with traditional lenders. Some examples of these lenders include Home Trust, Equitable Bank, First National Excalibur, Haventre Bank, Bridgewater Bank, Canadian Western Bank, Citadel Mortgages, Peoples Bank of Canada, and Pine Canada Financial.

Someone might need to use a B lender if they have bruised credit or carry high debt loads, are self-employed or have inconsistent income, are new to Canada, or have recently filed for bankruptcy. Private lenders may approve mortgages with credit scores starting at 620, but usually charge higher interest rates and fees to balance the extra risk they take on. 

To summarize:

• Conventional mortgages: ≥680–700 credit score, typically 20%+ down payment, no insurance required
• Insured mortgages (CMHC): ~600 credit score, insurance required but smaller down payment allowed
• Private lenders: usually a fallback when you don’t meet traditional lending criteria, higher interest rates and fees due to added risk for the lender

"Strong credit is the foundation of homeownership, while the mortgage is the bricks. Together, they build your dream."

- Mike Bergeron, Counsellor Manager, Credit Canada 

How Credit Score Affects Mortgage Size & Rate

In general, the higher your credit score, the more you’ll be able to borrow—and the less interest you’ll pay over time. For example, someone with a strong score in the high 700s could be offered a rate around 4%, while someone with a lower score in the mid-600s might be looking at a rate closer to 6%, depending on market conditions. That difference can add up to thousands of dollars over the life of your mortgage. 

However, just because the bank says you can spend up to $800,000 on a home, that doesn’t mean you have to. The words "up to" are key here and are what many home buyers overlook. You don’t want to spend so much on a home that it puts a strain on your overall finances. You’re almost always better off taking on a mortgage below the maximum amount you’re eligible for, so you have some financial wiggle room in case of unexpected expenses or emergencies.

Here’s how different credit scores can lead to different borrowing outcomes:

• Credit score: 780 – Typically approved easily, qualifies for a large loan with a low interest rate, and pays less interest overall.
• Credit score: 680 – Is often still approved, but might face a slightly higher interest rate and smaller loan amount.
• Credit score: 620 – May only qualify through a B lender or alternative lender, with a much higher rate and tighter loan limits.

What Lenders Review Beyond Your Credit Score

While your credit score is important, it’s not the only thing lenders look at when you apply for a mortgage. In addition to your credit, they also consider your income, how much debt you already have (known as your debt-to-income ratio), job stability, and how much money you have for a down payment. All of these pieces help lenders decide how much you can afford to borrow and at what rate.

Once you’re ready to explore your mortgage options, here’s a list of the key documentation you’ll need to have ready when you meet with your mortgage broker or agent:

• Proof of income (like recent pay stubs or job letters)
• A list of your monthly debts (credit cards, loans, etc.)
• Your most recent credit report
• Bank statements
• Proof of your down payment (such as proof of savings or a gift letter)

What to Do If Your Score Is Too Low to Qualify

If your credit score is below the minimum needed to qualify for a mortgage, there are steps you can take towards improving it. It’s important to make all your payments on time, every time, and keep your credit card balances low—this shows you can handle credit responsibly. Common factors that negatively impact your credit score include maxed-out revolving credit (like credit cards), accounts in collection, late payments, or excessive recent inquiries. Understanding these factors can help you focus your efforts on the areas that matter most.

It’s important to check your credit report regularly to make sure the information is accurate. Errors, like accounts that aren’t yours or incorrect payment records, can lower your score. You can pull your credit report online for free from each of Canada’s two credit bureaus (Equifax and TransUnion) once a year, and doing so won’t impact your score. You can also check your credit score and history through a third-party service, such as Credit Karma, ClearScore, or Borrowell, or your bank’s website or mobile app. For no charge, you can remove incorrect information by filing a dispute directly with the credit bureau.

If you’re close to qualifying for a mortgage, you may want to consider a co-signer with stronger credit, or look into mortgage insurance options that can help you get approved. Everyone’s path to homeownership looks different, and the right approach depends on your situation. If you’re not sure where your credit stands or what to do next, you can speak to a certified non-profit Credit Counsellor for a free debt assessment.

Get Support from Credit Canada

A score of 680 or higher can give you access to better mortgage options, but if yours is lower, there are ways to improve it. Knowing the differences between mortgage types helps you understand what’s realistic for you. While your credit score matters, lenders also look at your income, debts, job stability, and down payment, so strengthening these areas can boost your chances of qualifying.

Are you looking for support to improve your credit score before you apply for a mortgage? Credit Canada can help you get started. Our certified Credit Counsellors can provide confidential, judgment-free advice and tailor an action plan to your situation. Contact us today by calling 1(800)267-2272 or talk to our AI Agent, Mariposa.