B lenders are alternative mortgage lenders who serve clients that don’t meet the strict qualifications of A lenders (like big banks and credit unions). They include:
- Trust companies
- Monoline lenders
- Some credit unions
- Mortgage finance companies
They follow regulated lending practices but are more flexible with income, credit, and documentation.
✅ Who Should Use a B Lender?
B lenders are ideal if you:
- Are self-employed and can’t show traditional income
- Have a low or damaged credit score (typically 550–679)
- Have been recently discharged from bankruptcy or consumer proposal
- Carry high debt relative to your income
- Need short-term help to stop a power of sale
- Are new to Canada with limited credit history
💡 What B Lenders Look For
Unlike A lenders, B lenders assess you more on the overall picture than rigid rules.
They focus on:
- Equity or down payment (usually at least 20%)
- Ability to make payments
- Type of property (location, condition)
- Credit trends (not just score—are you rebuilding?)
- Income reasonability, even if it’s not T4 verified
💰 How Are B Lenders Different from Banks?
| Feature | A Lenders (Banks) | B Lenders (Alt Lenders) |
|---|---|---|
| Credit Score Required | 680+ | 550–679 (sometimes lower) |
| Income Proof | Strict (T4s, NOAs, job letter) | Flexible (bank statements, declared income) |
| Down Payment | 5%–20% | 20% minimum |
| Interest Rates | Lower | Higher (1–2% more) |
| Fees | Low or none | Lender & broker fees (1–2%) |
| Speed | Moderate | Fast approvals (2–5 days) |
| Typical Term | 1–3 years | 1–2 years (short-term solution) |
🛠️ Common Uses for B Lender Mortgages
- Buying a home after being denied at the bank
- Refinancing to consolidate debt
- Stopping a foreclosure or power of sale
- Rebuilding credit with a 1–2 year plan
- Transitioning from a consumer proposal or bankruptcy
⚠️ Things to Consider
- Higher interest rates than traditional banks
- Broker and lender fees (often 1–2% of loan)
- Shorter terms = more frequent renewals
- Exit plan needed: Many borrowers use B lenders temporarily, then switch to an A lender after rebuilding credit or income
🧠 Final Tip
Think of B lenders as stepping stones—they’re not your final destination but a useful way to:
- Buy time
- Solve a problem
- Get into or stay in the market while you stabilize your finances
Mortgage brokers play a crucial role when dealing with B lenders because they have direct access to a wide network of alternative lenders that are not available to the public. B lenders rely heavily on brokers to bring them qualified borrowers, and brokers know exactly which lender fits your unique situation—whether you have bruised credit, are self-employed, or need fast approval. They help you structure the application to highlight your strengths, gather the right documents, and negotiate the best possible terms. Without a broker, navigating B lender requirements can be overwhelming and costly, especially since most B lenders only work through licensed professionals. To connect to a licensed Canadian mortgage broker fill in a quick form below.
