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OACIQ Guide

Bad Credit Mortgage — Quebec Solutions 2026

Reading time: 8 min — Updated July 1, 2026

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Having bad credit doesn't eliminate your chances of homeownership in Quebec. Whether it's a recent bankruptcy, a consumer proposal, or simply a score under 600, adapted solutions exist — from type B alternative lenders to private lenders who evaluate your assets rather than your credit history.

An OACIQ-certified mortgage broker specializing in difficult credit knows each alternative lender's criteria and can find a solution where your bank said no. The goal: finance you today and improve your credit to refinance at a conventional rate in 1 to 2 years.

Key Points

01
Type B lenders (trust, MFC)
These institutions accept credit scores of 550 to 620 and non-traditional income (self-employed, commission). Rates: generally 1 to 2% more than A banks.
02
Private lenders
Private lenders (individuals or funds) focus mainly on your property value and down payment. Minimum credit score: often none. Rates: 8% to 18%, 1-year term.
03
First vs second mortgage
A private lender can finance in first position (if no existing mortgage) or second position (behind your main mortgage). Second position is riskier, therefore more expensive.
04
Exit strategy in 12 to 24 months
A good OACIQ broker plans from the start how to improve your credit to refinance to a conventional lender. Paying on time for 12 months can move a score from 580 to 680+.

Mortgage Options Based on Your Credit Score

CategoryValue
680+ (excellent)A banks — best rates
620–679 (good)A banks with conditions
580–619 (fair)B lenders — rate +1 to 2%
500–579 (weak)Alternative / private lenders
Under 500 or recent bankruptcyPrivate lenders — 8% to 18%
Required down payment (private)25% to 35% recommended

Frequently Asked Questions

What is the minimum credit score for a mortgage in Quebec?+

For chartered banks (type A), the minimum score is generally 620 (580 for some CMHC products). For type B lenders, it's 550 to 600. For private lenders, there's often no minimum score — it's the property value that matters.

Does a consumer proposal affect my ability to get a mortgage?+

Yes, but not permanently. A consumer proposal stays on your file 3 years after final payment. During this period, B and private lenders can finance you. After discharge, you can qualify for A lenders with good credit management.

What are the interest rates for a bad credit mortgage?+

B lenders: conventional rate +1 to 2% (about 5.5% to 7%). Private lenders: 8% to 18% depending on risk. These rates are temporary — the goal is to refinance to a conventional rate in 1 to 2 years.

Do I need a co-signer if I have bad credit?+

A co-signer with a good score can give you access to A lenders. Their credit compensates for your weakness, but their name appears on the property title or mortgage responsibility. An OACIQ broker can assess whether this is the best strategy for you.

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