Can You Get a Mortgage After a Consumer Proposal?

Navigating the financial world after a consumer proposal can be daunting, especially when it comes to substantial commitments like securing a mortgage. This article aims to answer the commonly asked question: “Can I buy a house after a consumer proposal?”

Understanding Consumer Proposal

A consumer proposal is a formal legal procedure governed by the Bankruptcy and Insolvency Act. This debt relief option allows individuals to make an agreement to pay their creditors a percentage of what they owe or extend the period for these payments. Such an agreement is crafted hand-in-hand with a Licensed Insolvency Trustee and requires consent from the debtor and their creditors .

Life After a Consumer Proposal: Financial Improvement

Fast forward five years from the consumer proposal completion, and you may find yourself in a considerably healthier financial state. You have diligently fulfilled your proposal terms and are now contemplating purchasing a house. The thought of owning your own home can be exhilarating but also nerve-racking given its significant financial implications.

Securing a Mortgage Post-Consumer Proposal: Is It Possible?

The possibility of securing a mortgage after a consumer proposal largely depends on the lender’s policies. Some major banks and institutions like the Canada Mortgage and Housing Corporation (CMHC) prefer to see a clean slate of at least two years from the date of proposal completion before they offer optimal rates and terms.

However, there’s a silver lining for those who can produce at least 20% of the purchase price as a down payment and demonstrate stable employment. They may be able to start house hunting right after completing the consumer proposal!

Rebuilding Your Credit: The Role of Credit Cards

You can initiate credit recovery during your consumer proposal period. A secured credit card is one of the effective ways to do so. This type of card is backed by cash. For instance, you may deposit $1000 with the lender and get a credit limit of the same amount. Use it like a standard credit card, paying off the balance in full each month. Since credit cards significantly influence your credit score, this can be an excellent method to regain financial credibility.

Alternatively, you can apply for a credit card with a low limit (like $500). If you consistently make at least your minimum payments punctually, it will reflect positively on your credit history. Later, the bank may offer a limit increase based on your excellent track record. It’s wise, however, to keep the limit within what you can comfortably afford.

Car Loans: Another Tool for Credit Improvement

A car loan is another avenue for rebuilding your credit after a consumer proposal. You can work with a lender to create a loan that suits your budget and needs. Several auto lenders work specifically with individuals who have undergone insolvency to offer fair vehicle financing option.

Other Options for Mortgage Approval

Having a financially strong co-applicant or a co-signer may reduce the wait time for purchasing a new home. If home ownership is on your horizon, it’s prudent to consult with a licensed mortgage professional. They can provide valuable advice on how you can prepare for a future mortgage application.

Buying a Home After a Consumer Proposal: A Feasible Goal

Owning a home post-consumer proposal is achievable with determination. Your most significant challenge may be saving for the 20% down payment, but your experience with the insolvency process may have equipped you with money-saving strategies. By focusing and saving consistently, you’ll soon find yourself in a home you can take pride in.

Debt Relief Specialists: A Crucial Resource

Debt relief specialists like those at Bankruptcy Canada can provide much-needed guidance during and after a consumer proposal. Their expertise can be invaluable in helping you navigate the path to financial recovery and eventual home ownership.


The journey to securing a mortgage after a consumer proposal is not without its challenges. However, with perseverance, strategic financial planning, and the right guidance, it’s certainly possible to own your dream home after completing a consumer proposal.

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