Second Mortgages
A second mortgage can help you access additional funds without replacing your first mortgage, with approval typically based on your remaining equity and overall file strength.
Alternative mortgage options across British Columbia
Bad Credit Mortgages in BC
A bank decline does not always mean you are out of options. Seven Lending helps BC homeowners and buyers compare B-lender and private mortgage solutions based on the complete application—not one credit score alone.
- Home purchases and refinances
- Equity take-out and consolidation
- Bankruptcy or consumer proposal history
- Self-employed and non-standard income
Approval is not guaranteed. Rates, fees, terms and lending decisions are set by the lender after reviewing the complete file.
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Property and equity matter
Private and B-Lender approvals are typically assessed in the context of your home equity, income details, and the overall file.
Short-term bridge financing
Many files are structured as a path toward improving credit and moving back to more conventional financing later.
Bad Credit Mortgage Options in BC
If traditional bank financing is not available right now, we can help review alternative mortgage and equity-based solutions based on your property, available equity, income details, and overall file.
What Is a "Bad Credit Mortgage"?
A bad credit mortgage — sometimes called a subprime or non-prime mortgage — is financing arranged for borrowers whose credit profile falls outside traditional bank guidelines. These loans are typically provided by:
- B-Lenders (trust companies and non-bank lenders regulated federally or provincially depending on the entity) — usually the first step down from a bank, often used for borrowers who are near-prime, self-employed, or have a moderate credit event.
- Private lenders — individuals or private mortgage funds who lend primarily against home equity rather than credit history, often used when a borrower doesn't currently qualify with a B-Lender. Are private lenders safe? is worth reading if this is new to you.
Seven Lending is a licensed mortgage brokerage. We don't fund mortgages ourselves — we assess your file and connect you with a suitable B-Lender or private lender from our network, and we're paid a brokerage fee for arranging the financing (details below). Rates, terms, and approval decisions are set by the lender, not by us.
Purchase, Refinance, or Equity Take-Out: Know Your Scenario
"Bad credit mortgage" covers a few different situations, and the numbers look different for each:
Buying a Home
If you're purchasing with a lower credit score, lenders will look closely at your down payment and the property itself. Down payment expectations for private and B-Lender purchase financing are typically higher than the minimums allowed for prime, insured mortgages, but the exact figure depends on the lender, the property, and your overall file — there is no single fixed number that applies to every borrower. See mortgage requirements in Canada for the general baseline banks work from.
Refinancing an Existing Mortgage
If you already own the property, refinancing is generally assessed on your available equity (the gap between your property's value and what you owe) rather than a down payment. Maximum loan-to-value (LTV) limits vary by lender and by whether the loan is first, second, or third position.
Taking Out Equity
If your goal is to access cash from your home — for debt consolidation, renovations, or other needs — this is treated as a distinct scenario from a straight refinance and is usually structured against your remaining equity after your current mortgage balance. See our BC Home Equity Loan page, taking equity out of your home, or home equity loan with bad credit for a full walkthrough of this option. You can also run the numbers with our home equity loan calculator.
How Credit Events Are Assessed
Not all "bad credit" situations are treated the same way. Lenders generally look at:
- Bankruptcy — how long ago it was discharged, and whether you've re-established any credit since.
- Consumer proposal — whether it's active or completed, and your payment history on it. See debt consolidation vs. consumer proposal if you're weighing this against other options.
- Arrears or late payments — how recent and how frequent, on your mortgage versus other debts. How do banks check credit for a mortgage? explains what shows up on a lender's review.
- Low credit score with no major event — sometimes the simplest case, since lenders can rely more heavily on your income and property value.
In each case, lenders weigh the credit history alongside your equity position, income (if verified — see no income verification vs. self-employed mortgages), and the property itself. A recent, active bankruptcy or proposal will generally be harder to finance than one discharged several years ago — but individual lender policies vary, and some private lenders will consider files that B-Lenders decline. For a broader roadmap, see how do I get a mortgage with a bad credit history?
Credit Score: A General Guide, Not a Fixed Rule
The ranges below are a general industry guide to how lenders tend to think about credit scores in BC. They are not guarantees, and actual lender decisions depend on the full file — equity, income, property type, and the credit story behind the number.
| Approximate Score Range | General Guidance |
|---|---|
| Below ~600 | Often outside typical B-Lender guidelines; private lenders may still consider the file based on equity. |
| ~600–649 | May fit some B-Lender programs, depending on the rest of the file. |
| ~650–719 | Often within reach of traditional banks and credit unions, though not guaranteed. |
| 720+ | Typically eligible for the widest range of prime lending options. |
Even in the lower ranges, a private mortgage may still be possible if there's sufficient equity in the property — but this depends on the specific lender's criteria at the time of application, and should be confirmed with a broker rather than assumed. If improving your score is part of your plan, see 10 tips for improving your credit score and the impact of credit scores on private lending rates.
Debt Consolidation as a Path Back to Good Standing
For some borrowers, the real issue isn't the mortgage itself but high-interest debt elsewhere. Consolidating credit cards or other high-interest debt into a single, lower payment can help stabilize your finances and, over time, your credit score. See how debt consolidation works in Canada, compare it against debt settlement or a consumer proposal, and try our debt consolidation calculator or visit the main debt consolidation page.
What It Actually Costs
Bad credit and private financing costs more than a prime bank mortgage, and it's important to understand the full picture before applying:
- Interest rates are higher than bank rates to reflect the added risk to the lender. Rates vary by lender, LTV, and credit profile — ask for a current, written rate quote for your specific file rather than relying on a general figure. See our private mortgage rates page for current ranges by lender type.
- Lender fees and broker fees typically apply and are usually deducted from the loan proceeds or added to closing costs. Ask for an itemized breakdown before you commit.
- Legal and appraisal costs are generally required, since most B-Lenders and private lenders require an independent appraisal and legal representation to close.
- Terms are usually shorter than a conventional mortgage — often measured in months to a few years rather than a standard 5-year term — which is intended to give you time to rebuild credit before renewing or refinancing.
Ask your broker for a full cost breakdown, including the total cost over the term, before signing.
Risk and Exit Strategy
Because this type of financing is short-term and higher-cost by design, it works best as a bridge — not a permanent solution. Before proceeding, it's worth thinking through:
- What happens at renewal or term end if your credit hasn't improved as expected.
- Your realistic path back to conventional financing — for example, rebuilding your score, reducing other debt, or increasing income documentation.
- The risk of relying on home equity — if payments aren't manageable, the property secures the loan, and in a worst case can lead to foreclosure.
Every private or B-Lender mortgage we arrange should come with a clear exit strategy discussed up front — not just the approval.
What to Prepare for a Mortgage Review
Having the main property, income and credit documents ready can help a broker understand your situation and identify which lender types may be appropriate.
Property details
- Property address and estimated value
- Current mortgage statement
- Property tax information
- Purchase agreement, if buying
Income and finances
- Employment and income information
- Bank statements when requested
- Current debts and monthly payments
- Down payment or available equity
Your credit story
- Approximate credit score, if known
- Reason for past credit challenges
- Bankruptcy or proposal documents
- Steps taken to rebuild credit
Document requirements vary. Your broker will confirm what is needed for your application. Sharing preliminary information does not guarantee approval and is not a commitment to borrow.
How to Apply
1
Submit your information
Property value, mortgage balance, and the amount you're looking for.
2
Review and lender matching
We look at your equity position and credit story to identify lenders likely to consider your file.
3
Compare options and choose
You review the options presented, including rate, fees, and terms, before deciding.
Approval timelines vary by lender and file complexity — see how long mortgage approval takes for a general sense of the process, and ask your broker for a realistic estimate for your specific situation. For a fuller walkthrough of our process, visit how it works.
Related BC Financing Options
All Seven Lending Services — a full overview of what we arrange.
Frequently Asked Questions
Can I get a mortgage with a low credit score?
It depends on your overall file, not the score alone. Equity, income, and the credit story behind the score all factor in — some borrowers with low scores are approved through private lenders, others are not.
How long does a bad credit mortgage last?
Terms are typically shorter than conventional mortgages, often ranging from several months to a few years, depending on the lender and the plan to transition back to standard financing.
Do I need an appraisal?
Most B-Lenders and private lenders require an independent appraisal to confirm property value before approving financing.
Can I get financing during an active bankruptcy or consumer proposal?
It depends on the lender and how far along you are. Some private lenders will consider a file during an active consumer proposal if there's sufficient equity, while most B-Lenders prefer to see it discharged first. Speak with a broker about your specific timeline rather than assuming either way.
Will applying hurt my credit score?
The effect depends on the type of credit inquiry used. A preliminary conversation may not require a credit check, while a full application can require a hard inquiry. Ask your broker what type of check will be completed and when before you consent.
Is a bad credit mortgage the same as a HELOC?
No. A bad credit mortgage is typically a fixed-term loan from a B-Lender or private lender, while a HELOC is a revolving line of credit usually offered by banks to borrowers with stronger credit. See HELOC vs. home equity loan for the difference.
What happens if I can't renew or refinance at the end of my term?
This is why an exit strategy matters. Options can include renewing with the same lender, refinancing to a B-Lender or bank if your credit has improved, or selling the property. Discuss this with your broker before signing, not after.
Can self-employed borrowers with bad credit still qualify?
Yes, though the file is assessed a little differently — lenders will look at both your credit history and how your income is documented. See our self-employed mortgage page for how that side of the application works.
Are private lender rates fixed for the whole term, or can they change?
This depends on the specific lender and product — some are fixed for the term, others may be variable or subject to renewal review. Confirm the structure in writing before signing, and see our private mortgage rates page for a general sense of current ranges.
Do I need a lawyer to apply?
A lawyer is required to complete the mortgage — most B-Lenders and private lenders will not fund without independent legal representation.
More questions? Visit our full FAQ page.
Review Your Bad Credit Mortgage Options in BC
Every file is different. The best next step is to review your equity, your current mortgage position, and the credit issue behind the score so you know what type of lender may consider the deal.
Speak with a broker to understand which lender types may consider your application and what costs, risks and exit plan would apply.