What Credit Score Do You Need to Buy a House in Canada?

Most Canadian lenders want a credit score of 680 or higher for their best mortgage rates. Approval is often still possible around 650 if your income is stable and your down payment is reasonable. Below that, alternative lenders will usually still lend — at a higher rate, and with a plan to move you back to a prime lender later.

The number matters less than most people think, and more than the headline suggests. Lenders weigh your score alongside income, existing debt and down payment, so a 660 with no other debt can be a stronger file than a 720 carrying two car loans.

Why Credit Score Matters for Mortgage Approval

Your credit score is a numerical representation of how well you manage credit.

Lenders use it to evaluate your risk level when approving a mortgage.

A higher credit score generally means:

• easier mortgage approval
• lower mortgage interest rates
• better lender options
• higher mortgage affordability

A lower credit score may still qualify for a mortgage, but often with stricter conditions.

Minimum Credit Score for Mortgage Approval in Canada

Lenders across Canada follow general credit score guidelines when evaluating mortgage applications.

Credit ScoreMortgage Approval Chances720+Excellent approval and lowest mortgage rates680–719Strong approval with competitive rates650–679Many lenders still approve600–649Alternative lenders may be requiredBelow 600Private lenders may be needed

While the minimum credit score for mortgage Canada may be around 650, having a score above 680 significantly improves your chances of approval.

How Credit Score Affects Mortgage Rates

Your credit score also impacts the mortgage interest rate you receive.

Higher credit scores usually qualify for lower mortgage rates.

Example scenario:

Home price: $700,000
Down payment: $70,000
Mortgage amount: $630,000

A borrower with a 720 credit score may qualify for a lower interest rate compared to someone with a 650 score.

Even a small rate difference can change monthly payments by hundreds of dollars.

Improving your credit score before applying for a mortgage can save thousands over time.

Credit Score Requirements for First-Time Home Buyers

Many first-time home buyers in Ontario worry that their credit score may prevent them from buying a home.

In reality, mortgage approval depends on multiple factors.

Lenders also evaluate:

• income stability
• debt levels
• down payment
• employment history
• mortgage stress test results

If your credit score is slightly lower but your financial profile is strong, lenders may still approve your mortgage.

Other Factors Lenders Consider Besides Credit Score

Although credit score is important, lenders evaluate several other factors when determining mortgage approval.

Income

Stable income is essential.

Most lenders require two years of employment history.

Debt

Debt affects how much mortgage you qualify for.

Examples include:

• car loans
• credit cards
• student loans
• lines of credit

Lower debt improves mortgage affordability.

Down Payment

Minimum down payment requirements in Canada include:

• 5% for homes under $500,000
• 10% for the portion between $500,000 and $1.5M
• 20% for homes above $1.5M

A higher down payment reduces lender risk and improves approval chances.

Mortgage Stress Test

All insured mortgages must pass the mortgage stress test Canada.

Borrowers must qualify at:

• Bank of Canada benchmark rate
• or their mortgage rate plus 2%

This ensures homeowners can still afford their payments if interest rates increase.

How Credit Score Impacts Home Affordability

Your credit score directly impacts how much home you can afford.

Better credit scores can qualify for lower interest rates, which increases purchasing power.

For example, even a slightly lower mortgage rate could increase affordability by $30,000–$60,000 depending on the loan amount.

If you want to understand how income impacts affordability, read our guide on:

How Much House Can I Afford With My Income? Income Needed to Own a Home in Ontario

/blog/how-much-house-can-i-afford-with-my-income-income-needed-to-own-a-home-ontario

Tips to Improve Your Credit Score Before Buying a Home

Improving your credit score can significantly increase mortgage approval chances.

Pay Bills On Time

Payment history is the largest factor affecting your credit score.

Late payments can reduce your score quickly.

Reduce Credit Card Balances

Try to keep credit card usage below 30% of your credit limit.

Example:

Credit limit: $10,000
Recommended balance: under $3,000

Avoid Opening New Credit Accounts

Applying for new credit before a mortgage application can temporarily lower your score.

Review Your Credit Report

Check your credit report for errors or outdated information.

Correcting mistakes can improve your score.

Maintain Long Credit History

Long-standing accounts help demonstrate responsible credit usage.

Avoid closing older accounts unnecessarily.

Credit Score and Mortgage Approval in Ontario Cities

Credit score requirements apply across Canada, but housing prices vary by region.

Buyers purchasing homes in cities like:

Bradford
Barrie
Newmarket
Vaughan
Pickering
Oshawa

may require stronger financial profiles because of higher property values.

Working with a mortgage broker Ontario can help buyers compare multiple lenders and improve approval chances.

Frequently Asked Questions

What credit score do you need to buy a house in Canada?

Most lenders prefer a credit score of 680 or higher, although some lenders approve borrowers with scores around 650depending on income and down payment.

Can I buy a house with a 650 credit score in Canada?

Yes. Many lenders approve borrowers with a 650 credit score, especially if they have stable income and a reasonable down payment.

What is considered a good credit score for a mortgage in Canada?

A credit score above 680 is generally considered strong for mortgage approval and helps secure better mortgage rates.

Does credit score affect mortgage approval?

Yes. Your credit score affects mortgage approval, lender options, and interest rates.

How can I increase my credit score before buying a home?

You can improve your credit score by paying bills on time, reducing credit card balances, avoiding new credit applications, and checking your credit report for errors.

Speak With a Mortgage Expert

If you're planning to buy a home and want to know if your credit score qualifies for mortgage approval, speaking with a mortgage professional can help you understand your options.

Whether you're a first-time home buyer, refinancing your mortgage, or improving your home affordability, expert guidance can make the process easier.

Contact:

Garry Sidhu
Mortgage Broker

🌐 www.garrysidhu.ca
📞 437-961-0004

Serving clients across:

Bradford
Barrie
Newmarket
Vaughan
Pickering
Oshawa
Aurora
GTA
Ontario

Reach out today for a free mortgage consultation and find out how your credit score affects your ability to buy a home.

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