What is B-Lender in Canadian mortgages?
Alternative lenders for borrowers who don't qualify with A-lenders. Accept lower credit scores, self-employed stated income, and higher debt ratios.
Why B-Lender matters
B-lenders make a mortgage possible when an A-lender will not. The higher rate is the cost of flexibility, and the usual plan is to move the client back to an A-lender at renewal once the file has improved.
What is the B-Lender limit for Canadian mortgages?
550-679 credit, higher rates (1-3% premium)
B-Lender example
Worked example
A self-employed borrower with strong bank deposits but modest taxable income can qualify with an alternative lender that uses stated or bank-statement income.
How brokers use B-Lender
- Explain the rate and fee premium up front and agree an exit plan, for example a one or two year term and a review before renewal.
- Compare lender fees as well as rates, because a lender fee can outweigh a rate difference on a short term.
- Check the prepayment terms, since alternative products can have different penalties and open periods.
- Self-employed income, recent credit problems, newcomers and high ratios are the common reasons to use a B-lender.
More questions about B-Lender
Do B-lenders require the stress test?
Many alternative lenders are provincially regulated or privately funded and set their own tests, often qualifying borrowers at the contract rate.
What credit score do B-lenders accept?
Typically 550 to 679, depending on the lender and the strength of the rest of the file.