Buying a home is the biggest financial decision most Canadians make. Your credit score is one of the most important factors in whether you qualify and what rate you pay. Here's exactly what you need to know.
The Minimums by Lender Type
Traditional banks (Big 6): Most require a minimum score of 680. With a score between 660-680, you may qualify but will face tougher scrutiny and fewer product options.
Credit unions: Often more flexible, with some accepting scores as low as 600-620, especially if you have a long banking relationship with them.
B-lenders (trust companies, monoline lenders): Typically accept scores from 600-650. Interest rates are higher than banks but lower than private lenders.
Private lenders: May work with scores below 600 but charge significantly higher rates (8-14% is common) and require larger down payments.
Why 700+ Makes a Real Difference
The difference between a 650 score and a 720 score on a mortgage isn't just about qualifying. It affects your interest rate. On a $600,000 mortgage, the difference between a 5.2% rate and a 4.9% rate is over $10,000 in interest over 5 years.
Lenders also look at your score as a signal of overall creditworthiness. A higher score can mean less scrutiny on other factors like debt-to-income ratio.
What Else Lenders Check
Your credit score is one factor among many. Lenders also look at: your income and employment stability, your down payment size (minimum 5% for homes under $500K, 10% for the portion between $500K-$999K, 20% for homes over $1M), your total debt-to-income ratio, and your credit history length.
First-Time Home Buyers
If you are a first-time home buyer, you may qualify for the First Home Savings Account (FHSA) and the Home Buyers' Plan (RRSP withdrawal). These programs help with down payment, but you still need to qualify for the mortgage itself.
If Your Score Isn't There Yet
Many of our clients come to us specifically because they want to buy a home. We work backward from the score they need to get approved and focus our dispute and repair work on getting them there.
We have helped clients go from 580 to 700+ in under 6 months, which is the difference between not qualifying at all and getting a competitive rate from a major bank.
The GTA housing market moves fast. Starting your credit repair now, even 6-12 months before you plan to buy, puts you in the strongest possible position when you're ready.