A consumer proposal can provide relief from overwhelming debt, but it also impacts your financial situation—including your ability to get a mortgage. If you’re currently in a consumer proposal and wondering whether homeownership is still possible, the good news is that you can get a mortgage, but it may take extra planning and the right lender.
In this guide, we’ll explore how a consumer proposal affects your mortgage application, which lenders might approve you, and how to improve your chances of securing a home loan.
Can You Get a Mortgage While in a Consumer Proposal?
Yes, but traditional banks (A lenders) are unlikely to approve you while you’re still in a consumer proposal. Instead, you may need to look at alternative lenders like B lenders or private mortgage lenders, who have more flexible qualification criteria.
Your ability to secure a mortgage will depend on several key factors:
✔ Your credit score – A consumer proposal lowers your credit score, making it harder to qualify for traditional financing.
✔ Your down payment – A larger down payment (typically 20% or more) can improve your chances of approval.
✔ Your income stability – Lenders will want to see consistent income from employment or self-employment.
✔ Your debt repayment progress – Some lenders will approve a mortgage while you’re in a consumer proposal, but many prefer if it has been fully paid off.
If you’re unsure how much mortgage you can afford, use our Mortgage Affordability Calculator to get an estimate based on your income and financial situation.
What Are Your Mortgage Options in a Consumer Proposal?
1. Private Lenders
Private lenders focus more on the property value and less on your credit history. However, they typically charge higher interest rates (ranging from 7% to 15%) and may require a larger down payment.
✅ Easier approval
✅ Fast access to financing
❌ Higher interest rates and fees
❌ Short-term loans (often 1-3 years)
2. B Lenders (Alternative Lenders)
B lenders, such as trust companies and some credit unions, are more flexible than banks and may approve a mortgage while you’re in a consumer proposal—especially if you’ve made significant progress on your repayments.
✅ More flexible credit requirements
✅ Lower rates than private lenders
❌ Higher rates than A lenders
❌ May require at least 12 months of on-time consumer proposal payments
3. Waiting Until Your Consumer Proposal Is Paid Off
If possible, waiting until you’ve completed your consumer proposal before applying for a mortgage increases your chances of approval and lowers your costs.
✅ Better interest rates
✅ Higher chance of A lender approval
❌ Delays homeownership
How to Improve Your Chances of Mortgage Approval
If you’re looking to get a mortgage while in a consumer proposal (or shortly after), follow these steps:
✔ Save a Larger Down Payment – A down payment of 20% or more increases your approval chances with alternative lenders.
✔ Make On-Time Consumer Proposal Payments – Demonstrating financial responsibility helps build lender confidence.
✔ Rebuild Your Credit Score – Use a secured credit card or small installment loan to start improving your credit.
✔ Increase Your Income Stability – Lenders favor borrowers with steady employment or business income.
✔ Work with a Mortgage Broker – Brokers have access to B lenders and private lenders who specialize in these situations.
Does It Make Sense to Pay Off Your Consumer Proposal Early?
If you’re in a position to do so, paying off your consumer proposal early can help improve your mortgage options. Once your proposal is fully paid, you’ll need to rebuild your credit for at least 12 months before qualifying for traditional lenders.
Pro Tip: Paying off your consumer proposal and waiting 1-2 years can significantly lower your mortgage costs compared to taking on a high-interest private loan.
Final Thoughts
Getting a mortgage while in a consumer proposal is possible, but it requires careful planning, a strong down payment, and often working with alternative lenders. While private and B lenders can offer solutions, it may be beneficial to pay off your proposal and rebuild your credit before securing a mortgage with better terms.
If you need help exploring your mortgage options while in a consumer proposal, Contact The Local Broker for expert advice tailored to your situation.
