Bad Credit Mortgage Ontario in 2025

Sometimes life throws curveballs our way and our credit score can take a hit. If you’re in need of bad credit mortgage approval in Ontario, you’re not alone.

The bigger problem is, those searching for bad credit mortgages Ontario get quoted higher mortgage rates and fees than they could be paying, costing $1,000’s extra. They also get bad advice about how to improve their credit situation long term.

How is it possible to get ahead to improve bad credit and reduce your interest rate without the right mortgage and advice?

So we wrote this article to show you how bad credit mortgage approvals work and to help you get approved for a credit impaired mortgage with lower rates and better terms.

Example of a 1 year mortgage term comparison of 3 lenders, with a lower credit score of 600

Lender 1 (Big Bank): 4.39% (declined the approval)

Lender 2 (Major B type lender) 5.99% + 2.5% fees (APPROVED)

Lender 3  (Credit Union) 4.99% with no lender fee (APPROVED)

By selecting Lender 3, the borrower saved $3,500 in 1 year on just $100,000 of mortgage, and is set up to lower their rate even further with Altrua Financials’ credit score booster service. 

Bad Credit Mortgage Options in Ontario – Get YOUR Best Option!

There are over 100 bad credit mortgage Ontario lender options available, but for one reason or another, usually only a fraction of these options are made available to borrowers. It’s important to search all lenders to help ensure your best rate, including:

• B mortgage lenders
• Credit unions
• Private lenders

Bad Credit Mortgage Rate Lender Review for January 2025

B Lender Mortgage

More B Lender Mortgages

Credit Unions in Ontario

More Credit Unions in Ontario

Private Mortgage Lenders

More Private Mortgage Lenders

Bad Credit Mortgages Before and After

Before:

• Missed Credit/ Lender Payments
• Credit Balance Over the Limit
• Consumer Proposal or Bankruptcy
• Mortgage Arrears
• CRA Income Tax Arrears

The mortgages for bad credit situations are designed to be a ‘stepping stone’ for a shorter period of time, such as 1 to 3 years. The focus is helping the borrower to graduate to better rates on each renewal. Given this, one of the main focuses for a bad credit mortgage is how to pay off the mortgage.

After:

• Debts settle
• One easy payment
• Credit score growth
• Thousands in interest saved
• A plan to lower your mortgage interest rate

APPLY to help ensure the best mortgage rate, regardless of your situation!

Switch from Bad Credit to Good Credit Low Rate Mortgage

One of the most important goals with a bad credit mortgage is switching out of it into a lower mortgage rate at the end of the term. There are a few lenders we work with that make the transition easier at the end of the term, so that you can go from the ‘B lender’ side to ‘A lender side’ on the renewal after 1 year, without even switching lenders. All we need to do in these cases is demonstrate improved credit and the renewal happens easily from higher to lower rate. Connect with us for more information.

Better Rates for Bad Credit Mortgages

Just because your credit is lower doesn’t mean you should be getting a bad deal. Far too often, borrowers with lower credit scores accept bad credit mortgage approvals with rates, fees and terms that are not as good as they could be. 

The solution is working with a mortgage broker who searches for more options, cuts the lender fees, and works to set you up for a better mortgage at each renewal. We strive to be that Broker of choice at Altrua Financial and work to gain each client’s trust by showing them the difference.

Cutting Mortgage Lender Fees

Lender and broker fees can be cut substantially if not cleared completely, depending on the application. 

In almost every case at Altrua Financial, when we compare an existing bad credit mortgage approval to ours, we find ways to reduce the fees involved, saving borrowers thousands of dollars. In the rare case we can’t reduce or clear the fees, we happily confirm that the borrower is already set up with the best mortgage.

Guaranteed Approval for Bad Credit Mortgages?

While nothing in life is guaranteed, there are some lenders we work with that have very relaxed guidelines. As long as there is at least 20% equity in the home, we can usually obtain an approval, regardless of credit score. The more equity in the home, the lower the rate, For example if there is 50%+ equity in the home, we can obtain some of the lowest bad credit mortgage rates for a home purchase or mortgage refinance.

Improving Your Credit for Lower Mortgage Rates

Improving your credit score to get a lower mortgage rate is both a short term and long term game plan. In the short term of just 2 or 3 months, it’s amazing how a few minor, relatively simple changes can make a huge positive impact on the credit score. Over 2 or 3 years is when we can make the most noticeable gains for lowering the mortgage rate.

The goal is to spend even just a few minutes working together to help bolster your score as fast and as easily as possible and to watch your rate drop in the process. 

What is the lowest credit score to get a mortgage? 

The lowest credit score to get a mortgage is technically 300, because this is the lowest possible credit score. Even with the lowest possible credit score, several bad credit mortgage lenders will consider approving. Mortgage rates tend to be higher with lower credit scores. However, there are still ways to lower the rate with any credit score, as will be discussed below. 

Given this, you can get a mortgage with a credit score 550. While it is still considered a bad credit score, it’s not the lowest. It’s easier to work with a credit score 550, and many mortgage lenders are available for those with more home equity or down payment.