Bad credit · consumer proposals · bankruptcy · collections · Calgary & all of Alberta
Bad credit, a consumer proposal or a bankruptcy: what a Calgary mortgage actually takes
Yes, there is almost always a route. But the honest version of it starts with a number most sites skip.
About 20 minutes, no credit check to start, no obligation. Or call (403) 241-3255.
Josh Tagg is a Calgary mortgage broker who takes bruised-credit files across Alberta — scores in the 500s and 600s, consumer proposals, discharged bankruptcies, collections and judgments. He leads the Mortgages for Less team at INDI Mortgage, has been arranging mortgages in Alberta since 2006, took over the brokerage his father founded in 2003, and is licensed by the Real Estate Council of Alberta. The team holds a 5.0 rating from close to 300 Google reviews. This office keeps a maintained library of what each lender’s own broker guidelines actually say about credit — which beacon band maps to which loan-to-value, which lenders will look at a discharge that is days old and what they charge for it, and where a bruised score quietly shrinks how much you can borrow instead of declining you. If you have been declined, or you are part-way through a rebuild and want to know what you would qualify for now versus in a year, send us the situation and we will give you the real answer — including when the answer is that waiting six months will save you a great deal of money. Book a call, apply online, or phone (403) 241-3255.
Figures on this page come from lenders’ own broker guidelines and bulletins as recorded in this office’s lender library, September 2026. Credit policy changes often and varies by province — some of the most permissive floors in these grids are marked as Ontario-only, so an Alberta borrower should not assume them. Treat this as the shape of the market, not a quote.
Why bad credit means more down payment, not less
This is the part that gets skipped, and it is the part that decides whether you can buy this year.
A down payment under 20% makes a mortgage high-ratio, which means it must be default-insured. That puts two approvals between you and the house: a prime lender has to want your file, and the insurer has to approve your credit as well. That is a gate a 20%-down mortgage simply does not have. We are not going to print an insurer’s minimum credit score here, because we do not have a source we would stand behind for it — but the practical consequence is not in doubt: if your credit is damaged today, the 5%-down route is generally not open to you today.
So a bruised file routes to an alternative or “B” lender, and there the down payment is set by your score. One B lender’s published grid:
| Beacon score | Maximum loan-to-value | Down payment that implies |
|---|---|---|
| 600 or above | 80% LTV | 20% |
| 540 – 599 | 75% LTV | 25% |
Other lenders’ guidelines say the same thing in their own words. One caps alternative lending at 80% LTV and runs a bruised tier down to a 560 beacon on an owner-occupied home. Another states that beacons under 550 are considered at a reduced loan-to-value with enhanced documentation. A third sets a working floor around FICO 575. One puts all non-conforming mortgages at a maximum 65% LTV — 35% down. And one ties it to your ratios instead: up to 65% GDS/TDS you can go to 80% LTV, but if your ratios run up to 80% the maximum LTV drops to 65%.
Josh Tagg would rather say that on a first call than after you have written an offer you cannot finance. It is also why the first question here is never “what rate can you get me” — on a bruised file the rate is the last thing that moves, and the down payment is the thing that decides whether there is a deal at all.
Two different files both get called “bad credit”
Almost every argument about this topic comes from these two being mixed up. They are not the same file and they do not get the same terms.
| Damaged credit right now | A past insolvency you have recovered from | |
|---|---|---|
| What it looks like | Score in the 500s or low 600s, recent missed payments, collections, an active or recently completed proposal | Discharged two or more years ago, two re-established tradelines paid on time since |
| Who lends | Alternative (B) lenders, then private | Prime lenders — ordinary banks and monolines |
| Down payment | 20–25%, sometimes more | From 5%, because the mortgage can be insured |
| Rate | Higher, plus lender fees | Ordinary rates. The discharge affects approval, not pricing |
| Time | Available now | Available once the rebuild is done |
Both are legitimate. If you have seen a Calgary broker advertising a 5%-down mortgage after a bankruptcy, that is a real product and they are not making it up — but read the conditions, because the conditions are the whole thing. It requires you to be out of the bad-credit category, not in it.
What the 5%-down route actually requires
The rebuild is specific, and it is the same at prime lenders whose guidelines we hold. Two years of re-established credit after discharge — meaning new tradelines opened after the discharge and carried cleanly for 24 months. One Alberta bank words it as discharged a minimum of two years with payment history on two re-established lines, and treats credit counselling the same way. Bankruptcy and consumer proposals are generally assessed on the same basis.
That bank adds a collateral-side condition worth knowing before you fall in love with a listing: the property itself cannot have been included in a prior bankruptcy.
If your discharge is recent, you are not stuck — you are priced
The two-year rule is the door back to prime, not a waiting room you are locked out of. Alternative lenders compress that seasoning to almost nothing and charge for it. From lenders’ own guidelines:
- One alt lender accepts single and double bankruptcies discharged as little as one day, takes consumer proposals and pays them out through a refinance at up to 80% LTV, and states no minimum FICO — pricing the risk with beacon premiums instead, roughly +0.20% at 640–679 rising to +0.50% under 550.
- Another runs a “credit restore” program taking a borrower one day after discharge, and will pay out CRA arrears, property-tax arrears and consumer proposals through the mortgage.
- A third accepts ex-bankrupts at a six-month discharge, and consumer proposals with no minimum wait for a purchase once the proposal is completed.
This is the window both of the pages that currently rank for this question skip over — they serve people who are already two years out and rebuilt. If you were discharged last year, you are exactly the person those pages do not cover, and you still have options today. They cost more, and the point of taking one is to leave it: an alternative mortgage taken now, with a clean two years on it, is itself the re-established credit that puts you back on prime at renewal.
The Alberta bank rule almost nobody mentions
A bruised score does not always produce a decline. At one major Alberta prime lender it quietly produces a smaller mortgage instead. Its guidelines tier the debt-service ratios by beacon on an owner-occupied purchase:
| Beacon | GDS / TDS allowed | What it means for you |
|---|---|---|
| 680 or above | 44 / 39 | The full amount your income supports |
| Below 680 | 42 / 35 | Same income, same lender, noticeably less house |
Nobody tells you this on the phone, because from the branch’s side nothing went wrong — you were approved. You were just approved for less. A few points of beacon can be worth tens of thousands of dollars of purchasing power, which is the strongest practical argument for spending three months on your score before you shop rather than after you are declined.
How long does it actually stay on my credit report?
Shorter than most people fear, and the mortgage does not wait for it to disappear.
| Item | How long it typically reports |
|---|---|
| Consumer proposal | Equifax: 3 years after the included debts are paid. TransUnion: the earlier of 3 years after paid or 6 years after signing |
| Bankruptcy (first) | 6 years after discharge — 7 in Ontario, Quebec, New Brunswick, Newfoundland and PEI |
| Second bankruptcy | 14 years |
| Judgments | 6 years — 7 in Ontario, Quebec, New Brunswick and Newfoundland, 10 in PEI |
You do not have to wait for any of that. Prime becomes available at two years of re-established credit, long before the record clears, and alternative lending is available well before that. The report date matters for how your file reads; it does not set your timeline.
What actually moves a score, in order of weight
If you have months rather than years, spend them on the two things that are 65% of the score between them.
| Factor | Weight | What to do about it |
|---|---|---|
| Payment history | 35% | Never miss again, on anything, including the small accounts. Automate the minimums. |
| Utilization | 30% | Get every balance under 30% of its limit. This is the fastest legitimate move available to you. |
| Length of history | 15% | Do not close your oldest card to tidy up. Age is worth points. |
| Inquiries | 10% | Stop applying. See soft vs hard inquiries. |
| Type of credit | 10% | A mix helps, but never open credit purely to game this. |
More detail in our guides on increasing your credit score and what score you really need in Alberta.
What happens, step by step
| Stage | What happens | What we need from you |
|---|---|---|
| A look, before any application | We read the bureau and tell you which tier you are in today and what each one would cost | Your consent to pull, or your own copy of the report |
| Now or wait | The honest comparison: buying now on alternative terms against buying later on prime terms, in dollars | Your real timeline — a lease ending changes the answer |
| The rebuild list | If waiting wins, a short specific list — usually utilization, one or two tradelines, and nothing new | The discipline to not apply for anything else |
| Lender shortlist | Your score and your story matched against lenders that actually accept them, before any submission | Discharge or completion paperwork, if there is any |
| Approval | Submitted once, to the right place. A declined application costs an inquiry and weeks | Income documents and down payment history |
| The exit to prime | If you went alternative, a dated plan to move to prime at renewal — that clean term is the rebuild | Two years of never missing. That is genuinely the whole plan |
When the honest answer is “wait a bit”
- You are a few months from the two-year mark. Waiting two months to move from alternative terms to prime terms, and from 20% down to 5%, is usually worth far more than buying now.
- Your cards are near their limits. Utilization is 30% of the score and it moves within a statement cycle or two. This is the cheapest points you will ever buy.
- You have applied in several places already. Each hard inquiry costs you. Stop, and let us look before anyone else pulls.
- You do not have 20%. If your credit is damaged now and you have 5% saved, the gap is the problem to solve, not the lender. Sometimes the answer is a co-signer; often it is time.
- The debt is the actual problem. If collections and balances are the reason the score is down, clearing them may matter more than buying — see refinancing and debt consolidation if you already own.
If you already own a home and the pressure is arrears or a deadline rather than a purchase, start at stop foreclosure or private and second mortgages instead — different order of operations.
Real Alberta files
We publish these in full, numbers included. One Calgary homeowner stopped a foreclosure with bad credit and kept the house. In another published file, the borrowers’ credit scores were 574 and 616 — damage caused almost entirely by maxed-out revolving balances rather than missed payments, which is a distinction lenders care about a great deal and which made the road back short.
Two more case studies are on the way and we will link them the day they publish, not before: an Alberta couple who bought their first home after credit counselling (16 October 2026), and a household that went bankrupt in 2020 and became homeowners in 2026 (23 October 2026).
Our written guide to getting a mortgage after or during a consumer proposal covers that situation specifically.
Who this page is for
- Your score is in the 500s or 600s and a bank has already said no.
- You completed a consumer proposal recently and want to know what you qualify for now, not in two years.
- You were discharged from a bankruptcy and have been told to come back later, without being told what for.
- You have collections or a judgment on your report and no idea how much they are costing you.
- You are on an alternative mortgage already and want a plan to get onto prime at renewal.
Where we work
Mortgages for Less with INDI Mortgage is a Calgary brokerage and we take bruised-credit files across Alberta — Calgary, Edmonton, Red Deer, Lethbridge, Fort McMurray, Airdrie, Okotoks and the smaller centres in between. Credit policy also varies by province, and some of the most permissive lender floors are Ontario-only, so it matters that the person reading your file knows which rules actually apply in Alberta. This page sits alongside the rest of our mortgage services.
★ 5.0 · 293+ Google reviews
What Alberta homeowners say
Really good experience with the Mortages for Less Team. Tamar was very attentive to our needs.
Tamar was great to deal with. Efficiently got me everything I needed... And more. Thanks Tamar
Josh provided me with good advice and did not waste my time.
Easy to approach.understanding and very professional.
Didn’t end up getting a mortgage through him but Josh was incredibly helpful and provided objective advice.
Tamar is truly amazing and so patient. She helped us through the entire process (which was quite confusing to be honest). Highly recommend.
I recently used their service, Tamar was my broker and she did a great job. She solved all our doubts and gave us the best service.
Tamar was super helpful throughout the process of helping us renew our mortgage. We changed mortgage providers, but Tamar made the process smooth.
Common questions about bad credit mortgages in Alberta
Can I buy a home with 5% down if I have bad credit?
Generally no, and this is the most over-promised claim in the business. A down payment under 20% makes the mortgage high-ratio, which means it has to be default-insured — so a prime lender and an insurer both have to approve your credit. If your credit is damaged right now, that route is usually closed and you are looking at an alternative lender, where 20% down is the normal starting point and a weaker score pushes it higher. The 5%-down option is real, but it belongs to people who have completed a rebuild, not to people currently in credit trouble.
How much down payment do I actually need with bad credit?
Plan on 20%, and more if your score is low. One alternative lender publishes 80% loan-to-value at a beacon of 600 or above and 75% at 540 to 599 — that is 20% and 25% down respectively. Others cap non-conforming lending at 65% LTV, which is 35% down, or reduce the loan-to-value where beacons fall under 550. Alternative lenders charge for risk twice: once in the rate and once in the equity they require.
Is the 5% down after bankruptcy thing a scam?
No — it is a real product and the brokers advertising it are generally describing it accurately in their fine print. The condition is what matters: it typically requires you to be at least two years past discharge with two re-established tradelines paid on time for 24 months. At that point you are a prime applicant again, and 5% is simply the normal minimum for a prime applicant. The claim is true; it just is not a bad-credit mortgage.
I was discharged less than a year ago. Is anything available now?
Yes. Several alternative lenders will look at a discharge that is very recent — one accepts single and double bankruptcies discharged as little as one day, another runs a credit-restore program from one day after discharge, and a third takes ex-bankrupts at a six-month discharge and consumer proposals with no minimum wait once the proposal is completed. They price for it, and they want more equity. Taking one deliberately, with a clean two years on it, is itself the re-established credit that gets you back to prime at renewal.
What credit score do I need to buy a home in Alberta?
There is no single number, because the score sets which tier of lender you are in before it affects your rate. Broadly: prime uninsured lending generally wants a healthy score — one prime lender sets 680 as its minimum for all borrowers on uninsured deals — alternative lenders work in the 500s and 600s with more equity, and some have no stated minimum at all and price by beacon band instead. Scores below the 600s are a routing signal, not automatically a decline.
Will a bruised score just get me a higher rate?
Not only that. At one major Alberta prime lender a beacon below 680 tightens the debt-service ratios on an owner-occupied purchase from 44/39 to 42/35 — the same income at the same lender simply qualifies for less house. That is easy to miss, because nothing looks like it went wrong; you were approved, just for a smaller amount. A few points of beacon can be worth a lot of purchasing power.
How long does a consumer proposal or bankruptcy stay on my credit report?
A consumer proposal typically reports for 3 years after the included debts are paid at Equifax, and at TransUnion for the earlier of 3 years after paid or 6 years after signing. A first bankruptcy generally reports 6 years after discharge, 7 in some provinces, and a second bankruptcy 14 years. Judgments usually report 6 years, longer in some provinces. You do not need to wait for any of it to clear — prime becomes available at two years of re-established credit, and alternative lending long before that.
What counts as re-established credit?
New tradelines opened after your discharge and carried cleanly. The common standard is two tradelines — often a secured or regular credit card plus an instalment loan — each with at least 24 months of on-time history. One Alberta bank words it as discharged a minimum of two years with payment history on two re-established lines. Small limits used lightly and paid in full every month do the job; you do not need large credit to rebuild.
Can I still buy if I am currently in a consumer proposal?
Sometimes, through alternative lenders, and several will pay the proposal out through the mortgage itself where there is enough equity. Whether that is a good idea depends on the cost of the money against what it clears. For most first-time buyers it is usually easier to complete the proposal, then rebuild, then buy — but if you already own a home with equity the calculation is different. We will show you both sets of numbers rather than steering you.
Does my spouse’s good credit help?
Usually yes, and substantially. Lenders assess the joint file, so a clean co-applicant can change which tier you land in. It is not automatic — some alternative lenders price from the higher-beacon borrower while others look at the weakest link, and on some programs a guarantor has to occupy the property. It is one of the first things worth checking, because it can move you from alternative to prime terms without waiting.
What happens to collections and judgments?
They generally have to be dealt with, and where there is equity several alternative lenders will pay out judgments, collections, CRA arrears and property-tax arrears through the mortgage as a condition of funding. Anything registered against your title matters most, because it affects what sits ahead of the new lender. Bring the full list to the first conversation — these surface in underwriting regardless, and finding them late is what delays closings.
Does applying in several places hurt me?
Yes. Each hard inquiry costs points, and a file that has been shopped around and declined several times reads badly to underwriters. That is a real argument for having one person look at the bureau and place the file once, in the right place, rather than trying lenders in sequence. See our explainer on soft versus hard credit inquiries.
Do I pay you a fee?
On a typical residential mortgage, including most alternative lending, the lender pays the brokerage and you pay us nothing. Some alternative and private files do carry a broker fee, and where that applies it is disclosed in dollars, in writing, before you sign anything. Anyone who will not tell you their fee in dollars up front is not worth dealing with.
Send Josh Tagg your situation. We will tell you which tier you are in and what it costs.
A straight answer on the first call: what you would qualify for today, what you would qualify for after a rebuild, and which of the two is actually worth doing — in dollars, before anyone pulls your credit.
Apply online Book a discovery call
Or call (403) 241-3255. Josh Tagg, Mortgages for Less with INDI Mortgage — licensed by the Real Estate Council of Alberta.
Lender criteria on this page are drawn from lenders’ own broker guidelines and bulletins as recorded in this office’s lender library in September 2026, and are summarised for readability. Credit policy changes frequently, varies by lender and by province — some of the most permissive floors quoted in lender grids are marked Ontario-only — and every figure is subject to the lender’s and the insurer’s current guidelines and approval. Nothing here is a promise or prediction of outcome, an offer of credit, or a quote, and no lender is named as a recommendation. No minimum insurer credit score is stated on this page because we do not have a source we would stand behind for one. Eligibility, qualification, rates, costs and results vary by borrower, property and lender. Josh Tagg is a mortgage broker, not a licensed insolvency trustee, a credit counsellor or a lawyer; for advice about a bankruptcy, a consumer proposal or anything registered against your title, speak to the appropriate professional as well. This page is general information, not financial, mortgage, credit, tax or legal advice. Mortgages for Less with INDI Mortgage.