Updated: April 2025  |  bremo.io financial guides

Credit Score Needed for a Mortgage in Canada

Your credit score is one of the most important factors in a Canadian mortgage application. It affects not only whether you are approved, but what interest rate you will be offered. Even a small difference in your mortgage rate can mean tens of thousands of dollars over the life of a loan on a typical Canadian home purchase.

Minimum Credit Score for an Insured Mortgage (Under 20% Down)

In Canada, if you have a down payment of less than 20% of the purchase price, your mortgage must be insured through the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty. These insurers set minimum credit score requirements that lenders must follow:

• CMHC: Minimum 600 credit score (though many bank lenders set their own floor at 640 or 680)
• Sagen (formerly Genworth): Minimum 600 credit score
• Canada Guaranty: Minimum 600 credit score

While the insurer minimum may be 600, most major banks set their own internal minimums higher. TD, RBC, BMO, Scotiabank, and CIBC often want to see 640 to 680 for insured mortgages.

Credit Score for a Conventional Mortgage (20%+ Down)

With a 20% or greater down payment, your mortgage is uninsured (conventional). Lenders have more flexibility, but credit score requirements are typically stricter because there is no insurance backstop. Most major banks want to see at least 680 for a conventional mortgage, and some require 700. To get the best available rate, aim for 720 or above.

What Credit Score Gets You the Best Mortgage Rate?

In Canada, the best (lowest) mortgage rates at major banks are generally offered to borrowers with scores of 720 to 760 and above. Below that, you may still qualify, but lenders may add a small premium to your rate. The difference can be:

• 720+ vs. 640: Potentially 0.10% to 0.50% higher rate for the lower score
• On a $500,000 mortgage over 25 years, 0.25% higher rate = approximately $15,000 to $20,000 more in interest

Mortgage With a Score Below 600

A score below 600 makes qualifying for a mortgage at a major bank very difficult. Your options include:

• B-lenders and alternative lenders: Credit unions, mortgage investment corporations (MICs), and trust companies often work with lower credit scores. They charge higher rates, typically 1% to 3% above prime bank rates.
• Private lenders: Private mortgage lenders may approve very challenging applications but at significantly higher rates (6% to 12%+) and with substantial fees. Only considered as a last resort or bridge option.
• Delay and rebuild: For many Canadians with scores below 600, the best strategy is to spend 12 to 24 months rebuilding their credit before applying for a mortgage.

Other Factors That Matter Alongside Your Credit Score

Your credit score is important but not the only factor in a mortgage application. Lenders also look at:

• Income and employment: Stable, verifiable income is essential. Self-employed borrowers face additional scrutiny.
• Debt service ratios: The Gross Debt Service (GDS) and Total Debt Service (TDS) ratios must stay within lender limits
• Down payment source: Where your down payment came from (savings, gift, borrowed?) matters to lenders
• Property type and value: Some property types are harder to mortgage regardless of credit score
• Credit history details: Two missed payments five years ago is very different from bankruptcy two years ago, even if the scores are similar

How to Check If You Are Ready

Before applying for a mortgage in Canada, check your credit score through your bank app, Borrowell, or Credit Karma. Pull your full credit reports from Equifax and TransUnion to make sure there are no errors. If your score is below 680, consider spending 6 to 12 months improving it before applying — the interest rate savings will likely far exceed the cost of the delay.