How Long After a Consumer Proposal Can I Get a Mortgage?

Understanding a Consumer Proposal and Its Impact on Mortgage Acquisition

A consumer proposal serves as a legal approach to debt relief for numerous Canadians. It is rapidly becoming a popular alternative to bankruptcy. Consumer proposals can shrink your total unsecured debt by as much as 80%, and condense your repayments into a single manageable monthly payment.

Additionally, consumer proposals offer a stay of proceedings to provide protection against creditors and collection agencies, along with the opportunity to retain your assets. A major concern, however, for those considering a consumer proposal is the potential to secure a mortgage after filing, and the speed at which this can be accomplished. After all, retaining your home is a significant priority.

How Does a Consumer Proposal Affect Your Credit Rating?

When you plan to apply for a mortgage, every lender will review your credit score during the assessment of your application. If you have filed a consumer proposal, this could potentially influence your ability to have a successful mortgage application.

To put it plainly, if you have or recently completed a consumer proposal, you will be perceived as a credit risk. Even if you have finished your consumer proposal, you still have a history of being unable to make debt repayments. As a result, conventional lenders in Canada will typically be hesitant to approve a mortgage application unless you have at least two years’ clean credit history after the completion of your consumer proposal.

Mortgage Acquisition Post Consumer Proposal

How long after a consumer proposal can I get a mortgage? This is a common question that comes up when discussing consumer proposals. If you approach a traditional mortgage lender, it will likely take at least two years, or less if you find a suitable alternative lender. For this reason, it really is dependent on your lender, although most will want you to improve your credit score before lending to you.

Consumer Proposal

If you are able to get a mortgage or even have the financing for a mortgage renewal approved, you can do so even before your consumer proposal is completed. The only condition is that you will need to use your proceeds to pay off your consumer proposal. This means that you can apply for a mortgage whenever you like, even if you are in the midst of your consumer proposal.


Just bear in mind that you may need to show evidence of your attempts to rebuild your credit score.


Your mortgage rate while in a consumer proposal will also likely be higher than a conventional mortgage. The interest rate could, however, be negotiated when it comes to a mortgage renewal.

Speeding Up Mortgage Acquisition After a Consumer Proposal

There are several strategies you can employ to enhance your chances of securing a mortgage during a consumer proposal:


  • Complete your consumer proposal by paying it off in full;
  • Save up a 20% down payment for a property;
  • Consider working with a private lender over a conventional lender.


Work on rebuilding your credit score by taking on (and repaying) credit and cleaning up any reporting errors

Refinancing Your Mortgage to Pay Off Your Consumer Proposal

Refinancing your mortgage to pay off your consumer proposal is a viable option, and often it is the fastest way to pay off a substantial debt like a consumer proposal. You may wish to take on a larger mortgage to cover both your property amount and the consumer proposal, provided there is sufficient equity in your property to cover the additional loan required.

If you renew your mortgage early, you do need to be aware of potential prepayment penalties, which may not be beneficial alongside your consumer proposal. Lenders will also want to understand why you filed a consumer proposal in the first place to assess the risk of allowing you to refinance.

Benefits of Paying Off Your Consumer Proposal Early

There are several benefits of paying off a consumer proposal ahead of time. These include:


  • Easier acquisition of a mortgage;
  • Easier renewal of your mortgage;
  • The ability to work on rebuilding your credit score;
  • Easier access to credit;
  • Improved cash flow;
  • Financial freedom.


In conclusion, if you’re still wondering, how long after a consumer proposal can I get a mortgage?, you should book a free consultation with a Licensed Insolvency Trustee. They will be able to give you the best advice based on your unique situation. The sooner you reach out, the sooner you can get back on the path to financial freedom.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.