Can I get a mortgage after a consumer proposal?

Yes. You can get a mortgage after a consumer proposal, but the timeline and options depend on your situation. Some B-lenders will consider you while the proposal is still active (with a larger down payment). A-lenders typically require 2–3 years after the proposal is fully paid and discharged, with re-established credit. The key is rebuilding your credit score and saving a down payment during the waiting period.

How long after a consumer proposal can I get a mortgage?

The typical timeline is 2–3 years after your consumer proposal is fully completed and discharged. This gives you time to rebuild your credit score above 680. Some B-lenders may consider applications 1 year after discharge with a larger down payment (20%+) and higher interest rates. The consumer proposal remains on your credit report for 3 years after completion.

What credit score do I need for a mortgage after a consumer proposal?

A-lenders typically require a minimum credit score of 680, and some want 700+ from applicants with a history of consumer proposal. B-lenders may work with scores of 550–650 but charge higher rates (1–3% above prime). Start rebuilding credit immediately after filing your proposal — secured credit cards and small credit-builder loans are the fastest path back.

How much down payment do I need after a consumer proposal?

The minimum down payment depends on the lender type. B-lenders typically require 20% down or more for applicants with a consumer proposal history. A-lenders may accept as little as 5% down if your credit has been fully rebuilt and 2+ years have passed since discharge. A larger down payment (20%+) significantly improves your chances with any lender and eliminates the need for CMHC insurance.

What is the difference between a consumer proposal and bankruptcy for mortgage purposes?

A consumer proposal is viewed more favourably than bankruptcy by mortgage lenders. Consumer proposals show you made an effort to repay a portion of your debts rather than walking away entirely. A consumer proposal stays on your credit report for 3 years after completion, while a first bankruptcy stays for 6–7 years after discharge. The timeline to mortgage eligibility is also shorter with a consumer proposal.

Getting a Mortgage After a Consumer Proposal in Canada

A consumer proposal is a legal debt settlement process where you repay a portion of your unsecured debts through a Licensed Insolvency Trustee. It’s a lifeline for many Canadians struggling with debt — but it does affect your ability to get a mortgage.

The good news: you can get a mortgage after a consumer proposal. Here’s the roadmap.

What is a consumer proposal?

Aspect	Details
What it is	A legal agreement to repay a portion of your debts (typically 20–50%) over up to 5 years
Who administers it	Licensed Insolvency Trustee (LIT)
Credit impact	R7 rating on your credit report during and after the proposal
Duration on credit report	3 years after completion or 6 years from filing date (whichever is earlier)
Debts included	Unsecured debts (credit cards, lines of credit, personal loans, tax debt)
Debts excluded	Secured debts (existing mortgage, car loan), student loans under 7 years old

Timeline to mortgage eligibility

Phase 1: During the consumer proposal (Years 0–5)

Status	Mortgage Options
Proposal active, payments current	Very limited — some private lenders (10%+ rates, 20–35% down)
Proposal active, good payment history	Some B-lenders may consider with 20%+ down and strong income

Most buyers should focus on rebuilding during this phase, not on buying.

Phase 2: Proposal completed (Year of discharge)

Status	Mortgage Options
Just discharged, no rebuilt credit	B-lenders with 20%+ down, rates 2–4% above A-lender
Discharged, 6+ months rebuilt credit	B-lenders with 15–20% down, improving rates

Phase 3: 2–3 years after discharge

Status	Mortgage Options
2 years post-discharge, score 680+	Some A-lenders with standard down payment rules
3 years post-discharge, score 700+, clean credit	Full A-lender access, competitive rates
Proposal off credit report entirely	Best rates available

Summary timeline

Milestone	Timeframe	Lender Access
Consumer proposal filed	Year 0	Private lenders only
Proposal completed	Years 1–5 (depending on terms)	Private + some B-lenders
1 year after discharge	+1 year	B-lenders (20%+ down)
2 years after discharge	+2 years	Some A-lenders (rebuilt credit)
3 years after discharge (off report)	+3 years	Full A-lender access

Step-by-step mortgage recovery plan

Step 1: Complete your consumer proposal on time

Make all proposal payments as scheduled
Pay early if possible — completing your proposal faster starts the credit recovery clock sooner
Your LIT will issue a Certificate of Full Performance when the proposal is satisfied

Step 2: Rebuild your credit immediately

Start rebuilding during your proposal, not after:

Action	Timeline	Impact
Secured credit card	Get one immediately after filing	Builds positive payment history
Credit-builder loan	After 6 months	Adds an installment account
Second secured card	After 12 months	Shows multiple accounts in good standing
Unsecured credit card	After proposal completion	Demonstrates creditworthiness
Small personal LOC	1–2 years after discharge	Diversifies credit mix

Credit rebuilding rules:

Always pay the full balance by the due date — never carry a balance
Keep utilization below 30% of your credit limit
Never miss a payment — one missed payment can set you back significantly
Don’t apply for too much credit at once — space applications 3–6 months apart

Step 3: Save aggressively for a down payment

Down Payment	Your Options
5–10%	A-lenders only (2+ years post-discharge, 680+ score)
10–15%	Improves B-lender terms
20%+	Best option — avoids CMHC insurance (CMHC may decline with recent proposal)
25%+	Strongest position — opens most doors

A larger down payment compensates for credit history concerns and eliminates the mortgage insurance variable (CMHC and other insurers have their own approval criteria that may be stricter than the lender’s).

Step 4: Stabilize your employment

Lenders want to see stable, verifiable income:

Employment Type	What Lenders Want
Salaried	2+ years continuous employment
Self-employed	2+ years of tax returns showing stable/growing income
Commission	2-year average with consistency

Job-hopping or frequent gaps during the rebuilding period can add to lender concerns.

Step 5: Apply for a mortgage

Preparation	Details
Check your credit report	Ensure proposal is marked as completed, no errors
Gather all documents	Pay stubs, T4s, NOAs, bank statements, proposal discharge certificate
Get your credit scores	Know your Equifax and TransUnion scores
Work with a mortgage broker	Brokers know which lenders work with post-proposal applicants
Prepare an explanation	A brief letter explaining the circumstances of the proposal and what’s changed

Lender options by tier

A-lenders (best rates)

Requirement	Typical Threshold
Time since discharge	2–3 years minimum
Credit score	680+ (some want 700+)
Down payment	5–20%
Employment	2+ years stable
No missed payments since proposal	Mandatory

Expected rates: Market rates (4–6% depending on term and type)

B-lenders (alternative lenders)

Requirement	Typical Threshold
Time since discharge	0–2 years
Credit score	550–680
Down payment	20%+
Employment	1+ year stable
Rebuilt credit	At least one secured card, 6+ months

Expected rates: 1–3% above A-lender rates (6–9%)

Private lenders (last resort)

Requirement	Typical Threshold
Time since discharge	Can apply during or after proposal
Credit score	Less important — equity focused
Down payment	25–35%
Employment	Flexible
Exit strategy	Must show plan to move to A/B lender

Expected rates: 8–15%+ (short-term only — 1–2 year terms)

→ Types of Mortgage Lenders

Common mistakes to avoid

Mistake	Why It Hurts
Not rebuilding credit during the proposal	Delays your timeline by years
Applying too early	Rejections create hard inquiries on your report
Going straight to a private lender	High rates can create a debt spiral
Not disclosing the proposal	Lenders check — non-disclosure is mortgage fraud
Taking on too much new debt	Defeats the purpose of the proposal
Not working with a broker	You need someone who knows which lenders accept post-proposal applicants

Consumer proposal vs bankruptcy: mortgage impact

Factor	Consumer Proposal	Bankruptcy (First)
Credit report notation	R7	R9
Duration on credit report	3 years after completion	6–7 years after discharge
Lender perception	More favourable	Less favourable
Timeline to A-lender mortgage	2–3 years after discharge	2+ years after discharge
CMHC eligibility	Possible after rebuild	More restrictive
Down payment expectation	20%+ initially	20%+ initially

A consumer proposal is generally viewed more favourably because it shows you repaid a portion of your debts.

Credit Score for a Mortgage — Score requirements by lender type
What to Do When the Bank Denies Your Mortgage — Recovery strategies
Types of Mortgage Lenders — A-lenders, B-lenders, private
How to Increase Your Mortgage Amount — Qualify for more
Mortgage Stress Test Calculator — Check your qualification