Mortgages After Bankruptcy in Toronto and the GTA

A discharged bankruptcy stays on your Equifax credit file for six years after your discharge date, and 14 years for a second bankruptcy. Most bank underwriters decline any application that shows the flag, regardless of your current income or job stability.

That is a policy limit at that one lender, not a judgment on whether you can carry a mortgage today. Once you know which lenders look past the flag and on what conditions, your discharge becomes a timeline you can plan around rather than a closed door.

A first bankruptcy in Canada ends in an automatic discharge nine months after filing if you have no surplus income obligations, or 21 months if you do. A second bankruptcy runs 24 months without surplus income, or 36 months with it.

Your discharge date starts the clock, but each lender tier measures from a different point on it.

Day 1 after discharge

Private lenders will typically finance a purchase or refinance right away, basing the decision on home equity and the exit strategy rather than your credit score.

12 to 24 months after discharge

B-lenders and trust companies want two trade lines reporting on time and a written explanation letter before they will approve a standard rate mortgage.

2 years discharged, 2 years rebuilt

Banks and credit unions generally hold to a “2 plus 2” rule: two years since discharge and two years of clean, re-established credit before a standard CMHC-insured approval.

Open one or two secured credit cards in the first few months after discharge and run small recurring bills through them, paid off in full every month. This is the fastest route to the trade-line history that B-lenders and banks check.

Keep balances under 30% of the limit and pay on the due date every time. A single missed payment during your rebuilding window can push back the date a B-lender or bank will look at your file.

Two reporting trade lines with 12 to 18 months of on-time history is typically the threshold a B-lender looks for, and a mid-600s beacon score is realistic in that window if payments stay current.

Your options change month by month after discharge. Here is who says yes, and when.

Private Lenders

Individual and corporate lenders who secure the loan against your equity rather than your credit history. Usually available immediately after discharge, at a higher rate and shorter term, with a plan to move to a B-lender once your file has aged. Read more about how our private mortgage lending works.

B-Lenders and Trust Companies

Alternative institutions that accept a discharged bankruptcy once you have 12 to 24 months of rebuilt credit and a documented explanation letter. Rates sit between private and bank pricing, and terms are usually one to three years.

Banks and Credit Unions

Standard A-lender pricing and CMHC-insured terms become available once you are two years past discharge with two years of re-established credit. This is the tier most clients graduate into once their file is clean.

Private lenders working with a recent discharge generally ask for 25% to 35% in equity or down payment, since they are pricing the discharge into the loan-to-value rather than the rate. B-lenders often move that down to 20% once you are a year or more past discharge with clean payment history.

Once you qualify with an A-lender, standard CMHC-insured minimums apply again: 5% on the first $500,000 of purchase price, and 10% on the portion above that up to $1.5 million.

Talk to a broker who works with discharged borrowers across Toronto and the GTA every week.