How to Qualify for a Mortgage After Bankruptcy in Canada

Shawn Johnson • April 1, 2026

Financial setbacks happen.


Bankruptcies and consumer proposals are more common than most people realize—and they don’t define your future.


Going through one doesn’t mean homeownership is off the table forever. It simply means lenders want to see that you’ve taken control, learned from the past, and built a stronger financial foundation moving forward.

What lenders look at after a bankruptcy or consumer proposal


How long it’s been since your discharge
Your discharge date matters. For lenders, this is your reset point. There’s no law that says you must wait a specific amount of time before applying for a mortgage, but the longer your track record after discharge, the stronger your application becomes. What matters most is how responsibly you’ve managed your finances since then.


Your credit rebuild
Re-establishing credit is critical. After discharge, most people start with a secured credit card and use it consistently and responsibly.


To be considered fully re-established, lenders typically want to see:

  • Two active trade lines
  • At least two years of clean payment history
  • Credit limits of around $2,500 on each
  • No late or missed payments


Your down payment or equity
The more money you can put down—or the more equity you have when refinancing—the lower the risk for the lender. A stronger down payment often opens the door to better terms and more lender options.


Your debt service ratios
Lenders will also look closely at how much of your income goes toward housing and other debts. The stronger your income relative to your monthly obligations, the easier it is to qualify.


Conventional vs. insured mortgage options


To access the most competitive mortgage products, lenders typically want to see:

  • At least two years plus one day since discharge
  • Fully re-established credit
  • Minimum down payment requirements met
  • Mortgage insurance in place if your down payment is under 20% (through CMHC, Sagen, or Canada Guaranty)
  • Total debt obligations generally not exceeding 44% of your gross income


Alternative lending options


Not every situation fits neatly into a bank’s box—and that’s where alternative lending can help.

Independent mortgage professionals work with both traditional and alternative lenders, including those who specialize in complex financial situations. These lenders look at the full picture: equity, income stability, and your plan moving forward.


While rates and terms may not be as competitive as prime lending, alternative financing can be an effective short-term solution—especially if you need a mortgage before your credit is fully rebuilt.


Let’s talk about your next step


Whether you’re planning ahead for the best possible mortgage—or need a solution sooner rather than later—there are options available.


If you’d like help mapping out a clear path forward, reach out anytime. I’d be happy to review your situation and help you build a plan that gets you back into homeownership with confidence.


Shawn Johnson

Senior Mortgage Specialist

Deposit vs. Down Payment: Key Differences for Homebuyers

By Shawn Johnson • May 13, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.

Employment and Mortgage Qualification: What Lenders Look For

By Shawn Johnson • May 6, 2026
When you apply for a mortgage, your employment history and status carry a lot of weight. Even if you feel secure in your job, lenders need proof that your income is reliable and will continue. To them, your employment status is one of the strongest indicators of whether you can make your mortgage payments long term. Here’s how lenders typically view different employment situations: Permanent Employment This is the gold standard. Once you’ve passed any probationary period and hold permanent status, lenders see you as a lower risk. It shows that your employer is committed to you, and your income is steady. Probationary Periods If you’re still on probation—usually 3 to 6 months, though sometimes longer—lenders may hesitate. That’s because your employer can end your contract without cause during this period. Once probation is over, you’re considered more secure. That said, context matters. If you’ve worked with the same company for years as a contractor and just transitioned into full-time employment, lenders may accept a letter from your employer confirming that probation is waived. Documentation is key here. Parental Leave Being on or about to take parental leave doesn’t mean you can’t qualify for a mortgage. As long as you have a letter from your employer guaranteeing your position and return-to-work date, lenders can use your regular salary—not your leave income—when assessing your application. Term Contracts This is one of the trickiest categories. Even highly skilled professionals with strong incomes can face challenges here. A term contract has a start and end date, which makes lenders question the stability of your future income. To use term-contract income, lenders generally want to see at least two years of history, or proof that your contract has already been renewed. The more evidence you can show of consistent employment, the stronger your case will be. The Bottom Line If you’re planning to apply for a mortgage, it’s important to understand how your employment status could affect your approval. Whether you’re starting a new job, coming back from leave, or working under contract, lenders want documentation that proves your income is reliable. 📞 If you’ve recently changed jobs or are planning a career shift, let’s connect. I can help you prepare your file so you qualify with confidence and avoid surprises in the approval process.