When it comes to getting a mortgage, there are two main types of lenders in Canada: A lenders and B lenders. A lenders are the big banks and credit unions that you’re probably familiar with, such as RBC, TD, Scotiabank. B lenders are smaller, private lenders that often specialize in helping people who don’t qualify for a traditional mortgage. Some examples of B lenders include Home Trust, Equitable Bank, and First National.
A Lenders
A lenders are the most common type of mortgage lender in Canada. They offer competitive interest rates and have a wide range of mortgage products to choose from. However, A lenders also have stricter lending criteria than B lenders. To qualify for an A lender mortgage, you typically need a good credit score, a steady job, and a low debt-to-income ratio.
B Lenders
B lenders are a good option for people who don’t qualify for an A lender mortgage. They may be willing to lend to people with lower credit scores, higher debt-to-income ratios, or other factors that would make them ineligible for an A lender mortgage. However, B lenders typically charge higher interest rates than A lenders.
Which Type of Lender Is Right for You?
The best type of lender for you will depend on your individual circumstances. If you have a good credit score and a steady job, you may be able to qualify for an A lender mortgage with a competitive interest rate. However, if you have a lower credit score or a higher debt-to-income ratio, you may need to consider a B lender.
Here are some of the key differences between A and B lenders in Canada:
- Interest rates: A lenders typically offer lower interest rates than B lenders.
- Lending criteria: A lenders have stricter lending criteria than B lenders.
- Down payment requirements: A lenders typically require a smaller down payment than B lenders.
- Mortgage insurance: A lenders may require mortgage insurance if you have a down payment of less than 20%.
How to Find the Right Lender
If you’re not sure which type of lender is right for you, it’s a good idea to talk to a mortgage broker. A mortgage broker can help you compare different lenders and find the best mortgage for your needs.
