Can you get a mortgage after being discharged from a Bankruptcy?

April 09 2026

Yes, it is absolutely possible to get a mortgage after being discharged from bankruptcy. While it does require some strategic planning and patience, many Canadians successfully return to homeownership within a few years of their discharge.

The path you take generally depends on how long you are willing to wait and the size of your down payment.

1. Prime Lenders (The "Two-Year" Rule)

Most major banks and "A" lenders typically require you to be discharged for at least two years before they will consider your application. During this time, they want to see that you have successfully re-established your credit.

• The "Rule of Two": To qualify for the best rates, lenders often look for "2-2-2"—two years since discharge, with two new lines of credit (like a credit card or car loan), each having a limit of at least $2,500, and opened AFTER discharge.
• Down Payment: You can often qualify with as little as 5% down, provided you meet the credit rebuilding requirements and have a stable income. The down paymetn must come from your own resources, so make sure any down payment is in your bank account for 90+ days.
• Credit Score: While CMHC guidelines allow for scores as low as 600, most prime lenders will want to see your score back in the 650–680 range.

2. Alternative Lenders (The "Sooner" Option)

If you don’t want to wait two years, alternative or "B" lenders can often provide financing much sooner—sometimes even one day after discharge.

• Higher Down Payment: Because you are considered a higher risk, these lenders typically require a minimum 20% down payment.
• Cost: Expect higher interest rates and potential "lender fees" (usually around 1% to 2% of the mortgage amount).
• The Exit Strategy: Most people use an alternative lender for 1–3 years as a "bridge" while they finish rebuilding their credit, then switch back to a prime lender when their rates are more competitive.

Crucial Steps to Take Now

To put yourself in the best position for approval, focus on these three areas:

• Secure Your Discharge Certificate: Lenders will require the official paperwork proving your bankruptcy is fully completed. Keep this document in a safe, digital place.
• Re-establish some credit: Apply for a couple of department store credit cards (Walmart or Canadian Tire) and request a $2,500 limit, but take what they offer you to start the clock ticking on the "two-year" rule. You can always request a limit increase later. If you cannot get an approval, you could try to get a Secured Credit Card where you provide a deposit (e.g., $500) as collateral, and the card reports your on-time payments to the credit bureaus just like a regular card. You can find more info at Secured Credit Card | Mortgage Managers
• Maintain Perfect Payment History: From the day of your discharge forward, even one late payment on a utility bill or cell phone contract can reset the clock for some lenders. Consistency is key.

Note: If this is a second bankruptcy, the waiting period and requirements from lenders are usually much stricter, often requiring 5 years or more of re-established credit history.