Buying a home is a big step for most Canadians but, did you know that your credit score plays a huge role in getting approved and the mortgage rate you qualify for? Whether you’re a first time buyer or are renewing your mortgage, being aware of your credit score and keeping it in good standing is essential.
Working with a mortgage broker and financial advisor can help you understand your credit score and improve it if needed, potentially saving you thousands over the life of your mortgage. But what is a good credit score in Canada? And, what do you need to know? Let’s take a look…
Your Finances and Credit Score Matter When It Comes To Your Mortgage
Many Canadians don’t fully understand how credit and mortgages work, which can lead to costly mistakes. For example, just over 60% of Canadians know their credit score, and more than two-thirds don’t realize credit card interest is calculated daily. Half of Canadians aren’t familiar with different mortgage types, and many don’t know that putting 20% down avoids mortgage insurance.
Lenders use your credit score to determine how risky it is to lend to you—and the higher your score, the better your chances of securing a lower rate.This is why working with an experienced mortgage broker or financial advisor, like myself, is so valuable. I can explain how to improve your credit score and help you make informed financial decisions through the process as well, so you don’t have to go it alone.
What Credit Score Do You Need, to Get a Mortgage?
The higher your credit score, the better your chances of getting approved for a mortgage at a good interest rate. If you have a lower score it doesn’t necessarily mean you won’t get approved. In Canada, credit scores range from 300 to 900, and a score of at least 660 is considered good. A score above 680 puts you in the best position for traditional mortgage approvals, while scores below 600 may require working with alternative lenders at higher rates. Since different lenders have different requirements, a mortgage broker can help you find the best options and rates based on your specific score.
What Affects Your Credit Score?
Your credit score is influenced by factors like your payment history, how much credit you use, the length of your credit history, and how often you apply for new credit. If you’re unsure of your score, you can check it for free through Equifax Canada or TransUnion. Some banking apps also give you a snapshot of your credit score. A mortgage broker specifically though can help you review your credit score and suggest ways to improve it to help you lock in the lowest rate possible.
How Much Does a Low Credit Score Cost You?
A lower credit score can mean higher mortgage rates. As of March 31, 2025, a well-qualified borrower might get a 5-year fixed-rate mortgage at 3.99%, while someone with a lower credit score might pay 5.00% to 6.00%. On a $500,000 mortgage with a 20% downpayment, just a 1% higher rate could cost you over $220 more per month—adding up to thousands over the lifespan of your mortgage! Working with a mortgage broker or financial advisor can help you find lenders offering better rates, even if your credit score isn’t perfect. This is why making sure you give yourself enough time to do your research before buying or renewing a mortgage is so important.
Improving Your Credit Score Before Renewal
If your credit score isn’t great, there’s still time to improve it before renewing your mortgage. Paying your bills on time, keeping credit balances low, avoiding too many new credit applications, and maintaining older credit accounts can all help. Since credit scores update every 30 to 90 days, making these changes now can improve your chances of getting a better mortgage rate when it’s time to renew.
Need Help Improving Your Credit Score So You Qualify For a Mortgage? I Can Help You Figure Out Your Financial Plan!
Your credit score has a big impact on your mortgage, but with the right steps, you can improve it and save money. Whether you’re a first-time homebuyer or renewing your mortgage, working with a mortgage broker helps you find the right mortgage options and best interest rates. I can even help if your credit score isn’t perfect.
Book a consultation with me and we can take a look at your finances and figure out what kind of mortgage you can afford. You can contact me online or call me at 705-315-0516. Let’s get you started on your new mortgage!