In Canada, most lenders require a minimum credit score of around 600 to 680 to qualify for a mortgage, depending on the lender and the type of loan.
For insured mortgages (where the buyer puts less than 20% down), mortgage insurers such as CMHC typically require a minimum credit score of 600.
However, many traditional lenders prefer borrowers with scores of 650 or higher, as stronger credit profiles generally qualify for better mortgage options and interest rates.
Credit score is only one part of mortgage approval. Lenders also evaluate a borrower’s income, employment stability, debt levels, and down payment.
Two important ratios are used when assessing mortgage applications:
Gross Debt Service (GDS) – the percentage of income required to cover housing costs such as the mortgage payment, property taxes, and heating.
Total Debt Service (TDS) – the percentage of income required to cover housing costs plus other debts, such as car loans, credit cards, and student loans.
Even with a strong credit score, high debt levels can affect how much a buyer is able to borrow.
Buyers with lower credit scores may still qualify for mortgages through alternative lenders, but the interest rates are often higher and additional conditions may apply.
Before applying for a mortgage, many buyers review their credit report to ensure there are no errors and to understand how their financial profile may affect mortgage approval.
