How Long After Bankruptcy Can I Get a Mortgage?

Getting a Mortgage Post-Bankruptcy in Canada: A Comprehensive Guide

“Bankruptcy is not the end of your financial journey. It is a fresh start.”

One of the most prevailing myths about bankruptcy is that it permanently disqualifies you from securing a mortgage. However, the reality is quite different. In fact, it’s possible to secure a mortgage after being discharged from bankruptcy in Canada.

How long after bankruptcy can you get a mortgage in Canada? The timelines may vary depending on the lenders’ policies. Generally, you may qualify for a mortgage between 1.5 to 2 years following your discharge date.

This comprehensive guide aims to shed light on how bankruptcy impacts your current mortgage, your ability to secure one in the future, and tips to re-establish your credit.

1. Impact of Bankruptcy on Your Mortgage

Filing for bankruptcy doesn’t directly affect your mortgage. Here’s why:

1.1 Bankruptcy and Secured Debts

Bankruptcy primarily deals with unsecured debts like credit cards and payday loans. A mortgage is a secured loan backed by an asset – your home. Therefore, bankruptcy doesn’t eliminate your mortgage, and you can retain your home.

The Bankruptcy and Insolvency Act forbids your mortgage lender from repossessing your home merely because you’ve declared bankruptcy. They can only do so if you default on your mortgage payments.

1.2 Home Equity and Bankruptcy

Depending on the province you live in and your property’s equity, you may need to pay a portion of your home equity to settle your debts.

For instance, in Ontario, up to $10,783 of home equity is exempt, meaning it’s inaccessible to your creditors. However, if your home equity exceeds this limit, your Licensed Insolvency Trustee may require you to pay the full equity. By doing so, you can keep your home and continue paying down your mortgage.

Discover more about bankruptcy exemptions and whether you’ll lose your home when filing for bankruptcy.

2. Bankruptcy and Mortgage Renewal

What happens if your mortgage term expires during bankruptcy? Will your lender allow you to renew your contract? It’s a complex question, as each lender’s policy differs. However, it’s important to note that your lender would typically prefer to renew your mortgage rather than foreclose on your home.

3. Securing a Mortgage Post-Bankruptcy

Securing a mortgage 1.5 to 2 years after your discharge date is possible. This waiting period is standard for a conventional mortgage or one insured by the Canada Mortgage and Housing Corporation (CMHC).

The main reason lenders consider your mortgage application post-bankruptcy is that they view you as a less risky borrower. Bankruptcy has eliminated your debts, and you’re less likely to default on mortgage payments. Moreover, having undergone credit counselling, you’re expected to be more financially responsible.

4. Types of Mortgages You Can Qualify for After Bankruptcy

Post-bankruptcy, you can apply for various types of mortgages. However, not all lenders will be willing to approve your application.

Lenders determine your eligibility based on several factors, including:


  • Credit score;
  • Income;
  • Assets;
  • Down payment size;
  • Gross Debt Service ratio (GDS);
  • Total Debt Service ratio (TDS);
  • Your bankruptcy discharge date.


The speed at which you can secure a mortgage depends on the type of lender you approach for financing.

4.1 Prime Lenders

Prime lenders, like the Big Five banks, specialize in conventional or CMHC-insured mortgages and offer competitive interest rates. However, they also have the highest application standards.

4.2 Subprime Lenders

Subprime lenders cater to borrowers with credit scores below 640 who do not qualify for a conventional or CMHC-insured mortgage. You could be eligible for a subprime mortgage in as little as three months to a year following your bankruptcy.

4.3 Private Lenders

Through a private lender, you can secure a mortgage the day after your bankruptcy discharge. However, applying for a loan through a private mortgage lender comes with many risks.

5. Improving Your Credit Post-Bankruptcy

Bankruptcy temporarily delays your ability to secure a mortgage. However, with diligent efforts to boost your credit score, lenders will consider your mortgage application. Here are some strategies to improve your credit:


  • Obtain a secured credit card;
  • Apply for a credit-builder loan;
  • Become an authorized user on someone else’s credit card account;
  • Pay all your bills on time;
  • Maintain low credit utilization;
  • Always pay the minimum payment on your credit card.


With meticulous planning and patience, you could be a homeowner in as little as two years post-bankruptcy.

When you’re ready to apply for a mortgage, consider hiring a mortgage broker. They can introduce you to lenders experienced in issuing mortgages to individuals who’ve gone through bankruptcy.

If you’re worried about how bankruptcy can affect your ability to secure a mortgage, don’t hesitate to book a free consultation with Bankruptcy Canada.

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As Licensed Insolvency Trustees with over two decades of experience, we can assess your financial situation and guide you through the bankruptcy process step by step.

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