Mortgage After a Consumer Proposal in Ontario: How Soon, and Which Lenders Say Yes

A consumer proposal doesn't lock you out of a mortgage. It changes which lenders will talk to you, and when.

Here's the short answer. You can get a mortgage after a consumer proposal in Ontario, and in some cases during one. Private lenders will lend while the proposal is still active if you have enough equity or down payment. Alternative lenders (B lenders) often approve you once the proposal is paid in full, sometimes before. The big banks, and insured mortgages with as little as 5% down, usually want about two years after you finish the proposal, plus new credit built in that time. Which of those doors fits you depends on your equity, your down payment and how far along the proposal is.

Most of what ranks for this question is written by insolvency trustees or posted on Reddit. Trustees know proposals inside out. They don't place mortgages. So this is the lender side of it, from someone who does.

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

It depends on the lender, not on a single rule. Here's how the timelines usually line up in Ontario:

Lender type	Where your proposal needs to be	Typical down payment or equity	Typical wait
Private lender	Active or paid off	20% to 25% or more	None
B lender (alternative)	Usually paid in full, sometimes active	About 20%	From the day it's paid off, sometimes sooner
Bank, conventional	Paid in full, credit rebuilt	20% or more	About 2 years after completion
Bank, insured (CMHC, Sagen, Canada Guaranty)	Paid in full, credit rebuilt	As little as 5% on the first $500,000	About 2 years after completion

Notice the clock. For the banks it usually starts when you finish the proposal, not when you filed it. Someone who filed four years ago and still has a year of payments left is further from a bank approval than someone who filed two years ago and paid it off early.

That's why the date on your Certificate of Full Performance matters so much. Your trustee issues it after the last payment. Lenders ask for it. Keep a copy somewhere you can find it.

Can You Get a Mortgage During a Consumer Proposal?

Yes, but not from a bank.

While a proposal is active, your credit report shows it, and most A lenders' systems stop there. The lenders who will look at you are private lenders and a handful of B lenders, and they care far more about the property and your equity than your score. Buying a home mid-proposal usually means 20% to 25% down, a higher rate, and a lender fee. Doable. Not cheap.

Honestly, buying during a proposal rarely makes sense unless something forces the timing. A separation. A sale you can't control. A home you're losing anyway. If nothing is forcing it, finishing the proposal first and buying with a B lender, or waiting the two years for bank pricing, almost always costs less over the life of the mortgage.

There's one exception I'd look at seriously, and it's for people who already own: borrowing against your home to pay the proposal off. More on that below.

What Lenders Look At After a Consumer Proposal

Once the proposal is paid, the questions change. Lenders stop asking "is there a proposal?" and start asking "what have you done since?"

They'll want the Certificate of Full Performance and the completion date. They'll pull your credit and look for re-established credit, meaning new accounts opened after the proposal and paid on time. Banks generally want at least two of these, often a secured or regular credit card plus a car loan or line of credit, with a year or two of clean history. They'll check that every account included in the proposal now shows as settled, not as an open debt you still owe. And they'll look at income and debt service the same way they would for anyone else.

A quick word on your credit report. Accounts included in a consumer proposal usually show an R7 rating. The proposal itself stays on your Equifax and TransUnion files for three years after you finish it, or six years from the date you filed, whichever comes first. Pay it off early and it can come off your report sooner. It's common to pull your reports after finishing and find old accounts still showing balances. Get those corrected before you apply anywhere. A lender who sees $14,000 in "open" collections will price you as if you still owe it.

Renewing Your Mortgage During a Consumer Proposal

This one catches people off guard. The mortgage on your home normally isn't part of a consumer proposal at all. It's secured debt, and you keep paying it as usual. So when your term ends mid-proposal, what happens?

In most cases, your current lender renews you. If your payments have been on time, the lender usually sends a renewal offer like any other year. You may not get its best rate, and you have less room to negotiate, but a straight renewal with the same lender is normally the easy path.

Switching lenders is where it gets hard. A new bank will pull your credit, see the active proposal and most likely decline. That leaves you with your current lender's offer, a B lender, or a private lender. If your own lender won't renew, or the offer is poor, that's the moment to get a broker involved. Not the week before maturity. Three to four months out. If you've already had a renewal turned down, my post on what happens when a renewal is denied walks through the options.

Refinancing During a Consumer Proposal to Pay It Off Early

If you own your home and have equity, this is often the smartest move on the table. You refinance, the new mortgage pays off the remaining proposal balance in one shot, and the trustee issues your certificate. Your three-year credit clock starts right away instead of years from now.

Here's how the numbers can look. Say your home is worth $700,000, you owe $420,000 on your mortgage, and $18,000 is left on your proposal. A B lender will typically refinance up to 80% of the value, which is $560,000. You'd take a new mortgage of around $445,000 to cover the old mortgage, the proposal payout, the lender and legal fees, and maybe a small cushion. You'd still have well over $200,000 in equity.

The trade-off is real. A B lender rate usually sits above bank rates, and there's often a lender fee of around 1%. If your current mortgage has a low fixed rate with two years left, the penalty to break it could wipe out the benefit. Run the numbers on both before you commit. My post on how mortgage penalties work explains what breaking will cost.

Done right, this usually isn't a forever mortgage. It's a one- or two-year bridge. You pay off the proposal, rebuild credit for a couple of years, and then move back to a bank at renewal at a better rate.

Consumer Proposal vs Bankruptcy: Which Is Easier for a Mortgage?

A proposal, usually. You paid back part of what you owed, the credit notation tends to drop off sooner, and many lenders see it as the more responsible of the two. If you're still deciding between them, that's a conversation for a licensed insolvency trustee, not me. But if bankruptcy is already part of your history, my guide to getting a mortgage after bankruptcy in Ontario covers how those timelines differ.

Rebuilding Credit After a Consumer Proposal

The fastest path back to bank rates is boring, and that's the point.

Open a secured credit card the month your proposal is done. Keep the balance under about a third of the limit and pay it in full every month. Six months to a year later, add a second account, a small instalment loan or a regular card, and treat it the same way. Don't apply for five things at once. Every hard inquiry shows, and a cluster of them right after a proposal looks like trouble.

Save while you rebuild. A bigger down payment covers a lot of sins on a credit file. Two years of on-time payments, two active accounts and a solid down payment is a file most A lenders will take seriously again.

My Take

If you're mid-proposal and own your home, look hard at paying it off with a refinance. That single move can save you years. If you're renting and mid-proposal, finish it, open two accounts, pay them perfectly and save. You'll be in a far better spot two years after completion than if you force a private mortgage now.

If you're not sure which camp you're in, send me your completion date, a rough idea of your income and what you have for a down payment or equity. I'll tell you straight which lenders are realistic today and what it would take to get to a bank.

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