Your credit score can make or break your mortgage dreams in Canada. While a lot goes into qualifying for a mortgage, including meeting income and down payment requirements, your credit score undoubtedly plays a key role. So, what kind of credit score do you need to secure a mortgage in Canada in 2025?
Key Points
- Banks require borrowers to have good credit, generally at least 680, to get approved for a mortgage in Canada.
- Borrowers with bad credit may still be able to secure a mortgage, though they’ll need to apply with a private or alternative lender.
- Before applying for a mortgage, consider taking steps to give your credit score a boost, which will improve your chances of approval with lower interest rates.
What Credit Score Is Needed For A Mortgage In Canada In 2025?
Going into 2025, the minimum credit score needed to get approved for a mortgage is 680. That said, it would be more accurate to say what credit score range you need.
Anywhere between 620 and 680 would be considered a minimum, depending on the lender.
Factors That Affect The Minimum Credit Score Needed For A Mortgage
The exact credit score required to get approved for a home loan depends on several factors, including the following:
- Lender Type: Traditional lenders (banks and credit unions) often require higher credit scores, typically 680 or higher. Alternative lenders may accept lower scores as low as 600, but you’ll pay higher interest rates or face stricter terms.
- Mortgage Type: If the mortgage is insured (with less than 20% down), a lower score of about 620 is typically the minimum credit score. If your mortgage is conventional (with at least 20% down), 680 tends to be the minimum credit score.
- Down Payment Size: A larger down payment can offset the lender’s risk and therefore allow for a lower credit score.
- Debt-To-Income Ratio: High debt levels can hurt your approval chances. Lenders assess your ability to manage mortgage payments alongside your existing debts. If you carry high debt relative to your income, you may need a higher credit score to mitigate the lender’s risk.
| Do You Know Your Credit Score? You can check your credit score for free using Loans Canada’s Compare Hub, |
What Qualifies As A Good Credit Score?
The higher your credit scores, the better your chances of getting approved for various loans and other credit products. Generally speaking, credit scores of 660 and above are considered good and mean that you are a low default risk and are likely to make your payments on time.
How Your Credit Scores Can Impact Your Mortgage Approval
Understanding where your credit score falls on the spectrum can tell you how it may affect your ability to secure a mortgage:
| Credit Score Range | Rating | Impact On Mortgage Approval |
| 760+ | Excellent | Credit scores above 760 are considered ‘excellent’. With credit in this range, you can expect to qualify more easily and access the best rates. |
| 725–759 | Very Good | Credit scores between 725 – 759 are considered ‘very good’. Similar to excellent credit, you can expect easy approvals and access to the lowest rates. |
| 660–724 | Good | Credit scores between 660 – 724 are considered ‘good’. Here too, you should have no trouble qualifying due to your credit. However, you may not get the same rates as those with very good or excellent credit. |
| 560–659 | Fair | Credit scores between 560 – 659 are considered ‘fair’. The minimum required credit score for a mortgage falls between the fair and good credit range of 620 – 680. If your credit score is below 620, you may find it hard to qualify for a mortgage with a traditional bank. You’ll also likely be unable to qualify for the best rates available on the market. |
| 300–559 | Poor | Credit scores between 300 – 559 are considered ‘poor’. With poor credit, you’d be considered a high-risk borrower. You’ll likely need to apply with a private mortgage lender to get a mortgage, and you’ll be charged higher interest rates. |
Learn more: Credit Score Range In Canada: What It Really Means
Can You Get A Mortgage With A Low Credit Score?
Yes, borrowers with bad credit can still get approved for a mortgage through alternative lenders such as credit unions, trust companies, and private lenders. These lenders may place less emphasis on your credit score and more focus on your down payment, home value, income, job stability, and overall financial health. Depending on the lender, they may accept bad credit scores, and some may have no minimum credit score requirement.
Things To Consider When Getting A Bad Credit Mortgage
If you plan to apply for a mortgage with bad credit scores from an alternative lender, you could face the following risks:
- Higher Interest Rates: Lenders who specialize in bad credit loans charge significantly higher rates than banks to offset their risk. This can lead to much more in interest charges over the life of your mortgage.
- Expensive Fees: Expect to pay additional or higher fees compared to prime lenders. These can add up quickly and lower affordability.
- Smaller Loan Amounts: Many bad credit mortgages come with lower loan amounts, which could limit your housing options.
- Limited Flexibility: You may face restrictions on prepayments, refinancing, or switching lenders.
Learn more: How To Apply For A Mortgage If You Have Bad Credit
| Tip: Get Pre-approved A good way to know if you can qualify for a mortgage with your current credit score is to get pre-approved. Ideally, you should initiate this process about 60 to 120 days before you plan to purchase a home. During the pre-approval process, the lender will examine your finances to determine the maximum amount they’re willing to lend you, as well as the interest rate they’ll offer. |
Find The Best Mortgage For Your Needs
| Amount | Rate | Availability | Products | |
 Loans Canada | Varies | Varies | All of Canada | - First mortgage - Refinancing - Renewal - Lender switch - Home equity loans |
 Alpine Credits | $10,000+ | Based on equity | All of Canada except Quebec | - Home equity loans |
 Mortgage Maestro | $10,000+ | 5.19%+ | All of Canada except Quebec | - First mortgage - Refinancing - Renewal - Line of credit (HELOC) - Reverse mortgage |
 Neo Mortage™ | Varies | 5.54%+ | All of Canada except Quebec | - First mortgage - Refinancing - Renewal |
 nesto | $100,000+ | 5.34%+ | All of Canada | - First mortgage - Refinancing - Renewal |
 Homewise | Varies | Varies | BC, AB, MB ON | - First mortgage - Refinancing - Renewal - Lender switch |
How To Improve Your Credit Scores For A Home Loan?
Good credit scores are one of the most important factors when trying to gain mortgage approval. It’s also a factor in calculating the interest rate you’ll be given.
Therefore, before you apply with any lender, consider improving your credit score. Here are a few simple things you can try that may help improve your credit scores.
- Paying bills on time and in full
- Do not carry a large amount of unpaid debt
- Use no more than 30% of your available credit card limit
- Don’t apply for too much new credit in a short amount of time
- Review a copy of your credit report for mistakes or signs of identity theft
- Consider credit-building products like a secured credit card
| How Long Does It Take To Improve Your Score? There’s no exact timeline on how long it takes to improve your credit score. Depending on where you’re starting from and your financial habits, Boosting your score can take anywhere from a couple of months to over a year. |
Other General Mortgage Requirements That Can Affect Approval
Credit scores are not the only factor lenders examine before they approve or decline your application. Lenders will usually examine your income, your employment record, your general expenses, and your current debts. Your lender might look at the following:
Mortgage Stress Test
For the most part, borrowers must undergo the mortgage stress test during the application process. This test helps lenders determine whether borrowers can still afford their mortgage payments in the future if interest rates rise.
To pass the stress test, you’ll need to qualify for a mortgage at 2% plus the mortgage interest rate you qualify for or the benchmark rate, currently 5.25%, whichever is higher.
Debt Service Ratio
Besides your credit score, mortgage lenders will also calculate your debt service ratio. There are two types of calculations:
- Gross Debt Service (GDS) Ratio. Your GDS ratio is calculated by adding all your monthly housing costs and dividing it by your gross monthly income. Housing costs usually include your mortgage payments, property taxes, the cost of heating and 50% of condominium fees (if applicable). Generally, your GDS ratio should not exceed 39% to qualify for a mortgage.
- Total Debt Service (TDS) Ratio. Your TDS ratio considers all your debts. It should be no higher than 44% and generally includes other debts such as credit cards, car loans, personal loans, student loans and spousal or child support payments.
Learn more: What Is A Debt Service Ratio?
Bottom Line
If your credit score falls short of your lender’s standards, it’s possible that your first mortgage application won’t be approved. But don’t give up, as you can improve your approval chances by boosting your credit scores before applying for a mortgage with any lender. This will not only increase your chances of approval, but doing so will also help you gain access to better interest rates.
FAQs
Can I get a mortgage with a 600 credit score?
How much of a home loan can I qualify for with good credit?
Can I get a mortgage with bad credit in Canada?
Will a mortgage pre-approval affect my credit?
I have no credit history, can I still get a mortgage?
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service..
