What Credit Score Do You Need for a Mortgage in Ontario?
What credit score mortgage Ontario lenders require is one of the most common questions I get from homebuyers. The short answer: it depends on the lender. The good news: you have more options than you might think—even if your credit isn’t perfect. Here’s everything you need to know about credit scores and mortgage eligibility in Ontario.
Different lenders have different requirements. Here’s a general breakdown:
| Credit Score | Lender Options | What to Expect |
|---|---|---|
| 720+ | All lenders (A lenders) | Best rates, best terms, most options |
| 680-719 | Most prime lenders | Good rates, standard terms |
| 620-679 | Some prime, alternative lenders | Higher rates, may need larger down payment |
| 550-619 | Alternative lenders (B lenders) | Higher rates, 20%+ down payment typical |
| Below 550 | Private lenders | Highest rates, short-term solution |
The key takeaway: A lower credit score doesn’t mean you can’t get a mortgage—it means you need the right lender and the right broker to find them.
How Your Credit Score Affects Your Mortgage Rate
Your credit score directly impacts the interest rate you’ll pay. Even a small difference in rate can mean thousands of dollars over your mortgage term.
Example on a $500,000 mortgage (5-year term, 25-year amortization):
| Credit Score | Approximate Rate | Monthly Payment | 5-Year Interest Cost |
|---|---|---|---|
| 750+ | 4.5% | $2,778 | $108,000 |
| 680 | 5.0% | $2,908 | $120,000 |
| 620 | 6.0% | $3,178 | $144,000 |
That’s a difference of $36,000 in interest over just 5 years between excellent and fair credit. This is why improving your credit score before applying—or working with a broker who can find you the best rate for your situation—is so important.
What Factors Make Up Your Credit Score?
Understanding how your credit score is calculated can help you improve it. In Canada, credit scores are calculated by Equifax and TransUnion based on five main factors:
- Payment History (35%) — Do you pay your bills on time?
- Credit Utilization (30%) — How much of your available credit are you using?
- Credit History Length (15%) — How long have you had credit accounts?
- Credit Mix (10%) — Do you have different types of credit (cards, loans, etc.)?
- New Credit Inquiries (10%) — Have you applied for credit recently?
How to Improve Your Credit Score Before Applying for a Mortgage
If you’re planning to buy a home in the next 6-12 months, here are actionable steps to boost your score:
1. Pay All Bills on Time
Payment history is the biggest factor. Set up automatic payments or reminders to never miss a due date. Even one late payment can drop your score significantly.
2. Lower Your Credit Utilization
Keep your credit card balances below 30% of your limit—ideally below 10%. If you have a $10,000 limit, try to keep your balance under $3,000 (or better, under $1,000).
3. Don’t Close Old Credit Cards
Length of credit history matters. Keep your oldest accounts open, even if you don’t use them often.
4. Avoid New Credit Applications
Each credit application creates a “hard inquiry” that can lower your score. Avoid applying for new credit cards or loans in the months leading up to your mortgage application.
5. Check Your Credit Report for Errors
Mistakes happen. Get your free credit report from Equifax or TransUnion and dispute any errors you find. I’ve seen clients gain 50+ points just by correcting inaccuracies.
What If My Credit Score Is Too Low for a Mortgage?
Here’s what most banks won’t tell you: even if your credit score is low, you still have options. As a mortgage broker serving Milton and the GTA, I work with over 50 lenders—including alternative and private lenders who specialize in helping buyers with credit challenges.
Options for lower credit scores include:
- Alternative (B) Lenders — Work with scores from 550-650, typically require 20% down
- Private Lenders — Focus on equity rather than credit, short-term solution
- Co-signer — A family member with good credit can strengthen your application
- Larger Down Payment — More equity = more options, even with lower credit
Learn more about mortgage options for credit challenges.
How a Mortgage Broker Helps Protect Your Credit Score
When you apply for a mortgage, it creates a hard inquiry on your credit report. While rate shopping within a short window is usually counted as one inquiry, working with a broker means I submit to the right lender the first time—saving you time and protecting your credit from unnecessary inquiries.
Plus, my services are free to you. Lenders pay my fee when your mortgage closes.
Frequently Asked Questions About Credit Scores and Mortgages in Ontario
What is the minimum credit score for a mortgage in Canada?
Most prime lenders require a minimum of 620-680. However, alternative lenders work with scores as low as 500-550. There’s no absolute minimum—it depends on the lender and your overall financial picture.
Will checking my credit score lower it?
No. Checking your own credit score is a “soft inquiry” and doesn’t affect your score. Only applications for new credit (hard inquiries) can lower it.
How long does it take to improve my credit score?
You can see improvements in as little as 30-60 days by paying down credit card balances. Building a strong payment history takes longer—typically 6-12 months of consistent on-time payments.
Can I get a mortgage after bankruptcy?
Yes. Most prime lenders want 2+ years after discharge with re-established credit. Alternative lenders may work with you sooner. Contact me to discuss your specific situation.
Does my spouse’s credit score affect my mortgage application?
If you’re applying jointly, yes—both credit scores are considered. In some cases, it may be better to apply with only the spouse who has the stronger credit.
Don’t Let Your Credit Score Hold You Back
Your credit score is important, but it’s not the only factor. I’ve helped clients with credit scores across the spectrum find mortgage solutions that work for their situation.
Whether your score is 750 or 550, let’s have a conversation about your options. I’ll give you honest advice about what’s possible—and if waiting to improve your credit makes sense, I’ll tell you that too.
Serving homebuyers in Milton, Oakville, Burlington, Mississauga, Brampton, and throughout the GTA.
Carl Zuzart is a licensed mortgage broker (License #M25001564) with Pineapple Mortgages, serving the Greater Toronto Area. Have questions? Call 289-298-2989 or email mortgages@zuzart.ca.
