It’s not the end of the world if you cannot afford a down payment and have bad credit. You can still manage to secure a mortgage if you know what to do. This is where our experts come in with a handy guide on how to get a mortgage with no down payment and bad credit in Canada. 

Get a Mortgage With Bad Credit History

There are different reasons why you can’t afford a down payment or why you have bad credit, and our team has come together to help you through your difficulties.

Before you can be sure if you have a bad credit history, you need to first determine your credit score. This figure will determine what area of the credit spectrum you are on, which will impact the mortgage rates.

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Determine Your Credit Score

To get your credit rating, you can either go directly to an institution with access to your credit history and pay for a detailed report. If you just want a basic summary, then there are a lot of free services online you can utilize. Once you have the figure, you will know whether you have poor, fair, good, very good or very good credit.

Anywhere from 300-560 is considered poor, 561-660 is fair, 661-725 is good, 725-760 is very good and above 761 is excellent. As you know, the more trustworthy your credit rating is, the more room to negotiate mortgage rates you have.

Getting a Mortgage with No Down Payment with Bad Credit 

Let’s say you have come up short in your credit report, which puts you in the poor and fair categories, can you still buy a house? The answer is yes.You can wait to rebuild your credit slowly by paying your credit card on time and keeping up with payments regularly, but that will take time.

Finding stable employment quickly can also help you build up your credit rating again [1]. Thus, it’s best if you can start paying your bills in a timely manner and look for a stable job simultaneously, but doing so can take months or even years.

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If you are short on time, you can try to save for a larger down payment. Those with good credit can get away with around 10%, but if you can save around 20% or more, it could help you secure that mortgage you want. Lastly, go with B lenders or private lenders. These lenders specialize in bad credit loans and will more likely consider your case. 

You can also get a mortgage without a down payment. We’re going to clarify that no down payment doesn’t mean there is no money for a deposit, it just means you aren’t using money you earned and saved. Instead, you will need to borrow the down payment either from the same lender you’re negotiating a mortgage with, or some other institution.

If your mortgage lender is a bank for example, you won’t be able to borrow the down payment from them. In Canada, this same financial institution cannot lend you both payments if they are a federal trust or a bank. In this case, you will need to search or another lender.

You can use your line of credit, find someone willing to give you a personal loan, or other avenues to get a down payment ready.

Reminders Before Getting a Mortgage with No Down Payment 

Getting a property is generally a smart investment, but if you are going into it with bad credit and no down, there could be some drawbacks. For starters, you are putting yourself even deeper in the hole by borrowing a down and mortgage. 

Mortgage Renewal

You will also most likely acquire a higher interest and have a lower equity stake in your own property. On top of that, you are more susceptible to the fluctuations of the real estate market and you are at risk of losing even more money.

While there are always ways on how to get a mortgage with no down payment and bad credit in Canada, our experts would not suggest not getting a mortgage with no down payment if you have better options.

Tips for a Mortgage Approval

To get a mortgage approval quickly, make sure you have all the necessary documents ready. Check your credit score beforehand so you know what to expect and if you should consult a B lender or a private institution. If time is of no issue, try to improve your credit score first.

If you are able to do so, save for your own down payment. It’s never a good look to have no money on-hand and needing to borrow the down payment too.

This is one area in your life where you shouldn’t reach for the stars. Know what you can and cannot afford and avoid putting yourself in an impossible situation. You should also shop around and compare mortgages to make sure you are getting the best rates.


How can I get a mortgage with bad credit and no down payment?

You can get a mortgage with bad credit and no down payment if you find an institution or lender that is willing to loan you the money. If time is of no constraint, you can work to improve your credit rating first and save for a down payment to secure a mortgage faster.

Can I get a mortgage with bad credit in Canada?

You can get a mortgage with bad credit in Canada if you work with a B lender or private lender. Working to improve your bad credit before consulting a mortgage lender will greatly improve your chances at securing a mortgage.

Can you buy a house with no money down Canada?  

Yes, you can buy a house with no money down in Canada. You can do this by borrowing the money or securing a loan from another institution if your mortgage lender is a bank or federal trust. Buying a house with no down in Canada doesn’t mean there is no down payment required, but it just means the money doesn’t come from you initially.


There are many ways on how to get a mortgage with no down payment and bad credit in Canada. Not having enough for a down payment or having bad credit doesn’t have to stand in the way of purchasing your new house. There are a number of ways to get a mortgage such as taking the time to rebuild your credit, saving for a larger down payment, or turning to a B or private lender. 


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