Getting a Mortgage After a Consumer Proposal in Canada (2026 Guide)

Consumer Proposal vs Bankruptcy for Mortgage Purposes

A consumer proposal is a legal agreement, arranged through a Licensed Insolvency Trustee, to repay part of your unsecured debt over up to five years. Lenders see it as less severe than bankruptcy, and it clears from your credit report sooner, so the path back to a mortgage is usually shorter.

A mortgage you already have is not included in a consumer proposal. If you keep making the payments, you keep your home.

How Long a Proposal Stays on Your Credit Report

The two credit bureaus measure it slightly differently:

Your Options by Stage

What is realistic depends on where you are in the process:

What "Re-Established Credit" Means

For insured mortgages and most A lenders, it is not enough for the proposal to be finished. You need to show new, well-managed credit, typically:

• At least two active credit accounts, such as a secured credit card and a car loan or line of credit • About two years of on-time payments on them • Low balances, ideally under 30% of each limit • A credit score in the mid-600s or higher

Start rebuilding while the proposal is still running. A secured credit card opened in year one of the proposal is two years old by the time you need it.

Using a B Lender as a Bridge Back

Many borrowers use a one- or two-year B lender mortgage to buy sooner, then move to an A lender at renewal once their credit is re-established. The trade-off is a higher rate, a lender fee, and often a broker fee for that first term.

This works well when the numbers are checked up front: compare the extra cost of the B lender term against how much rents or prices might rise while you wait.

Renewing an Existing Mortgage During a Proposal

If your mortgage comes up for renewal during a proposal, your current lender will often renew it, sometimes without a new credit check, as long as payments have been on time. Switching to a new lender mid-proposal is much harder. Talk to your lender or a broker a few months before renewal rather than signing the first offer by default.

A Step-by-Step Plan Back to an A Lender

1. Keep every proposal payment on time and get your certificate of full performance when it is paid off 2. Open a secured credit card early and use it lightly every month 3. Add a second trade line, such as a small loan or line of credit 4. Pull both credit reports after completion and make sure the proposal and included debts show as settled 5. Save a down payment. 20% opens up B lenders right away, and 5% works once you qualify for insurance 6. Talk to a mortgage broker about 6 months before you want to buy, to see which lenders fit your timeline