Prime / A Lenders
Prime lenders include Canada's big banks (RBC, TD, Scotiabank, BMO, CIBC, National Bank), credit unions, and monoline lenders (lenders that only do mortgages, like First National, MCAP, RMG, Street Capital). They offer the lowest rates and the most favourable terms, but have the strictest qualification requirements.
Credit score 650+, stable full-time income with 2+ years of employment, debt ratios under 39% GDS / 44% TDS, standard property types in urban areas, down payment as low as 5% (with CMHC insurance) or 20%+ (conventional).
5-year fixed 4.69%-5.29%, 5-year variable prime minus 0.50% to prime plus 0.25%.
Pros: Lowest rates, most flexible prepayment privileges (15-20% annual prepayment), portability, stress test applies but manageable, full consumer protection. Cons: Strictest qualification, slow with complex files, longer approval timelines (5-10 business days), limited flexibility for non-standard situations.
Best for: Borrowers with stable employment, good credit, standard property types, and straightforward income documentation.
B Lenders / Alternative Lenders
B lenders are federally or provincially regulated financial institutions that offer more flexible guidelines than prime lenders. They include companies like MCAN Mortgage, Community Trust, Equitable Bank, and several credit union alternatives that have dedicated B lending divisions.
Credit score 550+, self-employed or commission income accepted with less than 2-year history, debt ratios up to 50%+ in some cases, non-standard properties (rural, recreational, mixed-use) considered, recent credit events (late payments, consumer proposal) accepted with reasonable explanation.
5-year fixed 7.49%-9.49%, terms typically 1-3 years rather than 5.
Pros: Flexible qualification, faster approval (24-48 hours), clear path to prime lending after 12-24 months of on-time payments, more holistic assessment of your financial situation. Cons: Higher rates, shorter terms requiring more frequent renewal, less prepayment flexibility, may require higher down payment.
Best for: Self-employed borrowers, recent credit challenges, non-standard properties, borrowers who need faster approval or have ratios just above prime limits.
Private Lenders
Private lenders are individual investors or private companies that lend their own capital. They are not regulated as financial institutions and focus primarily on the property's equity rather than the borrower's credit. This makes them the most flexible option for borrowers with significant equity but challenged credit.
No minimum credit score, equity of 25%+ in the property, ability to demonstrate a credible repayment strategy, property must appraise at sufficient value. Income verification is often minimal.
9.99%-14.99%, terms 6-24 months, lender fees of 1-4% of the loan amount are common.
Pros: Fastest approval (days not weeks), most flexible on credit and income, good bridge solution for short-term situations, can close quickly (5-10 business days). Cons: Highest rates and fees, short terms requiring refinance, limited prepayment options, less consumer protection than regulated lenders, interest-only payments common.
Best for: Borrowers needing short-term financing (6-24 months), those with significant equity but poor credit, time-sensitive purchases or refinances that cannot wait for traditional approval.
Mortgage Investment Corporations (MICs)
MICs are pooled investment funds that lend mortgage capital. They operate similarly to private lenders but with more structure and regulatory oversight under Ontario securities law. MICs are a middle ground between private lenders and B lenders — they offer more flexibility than B lenders but more structure than individual private lenders.
Similar to private lenders — equity-focused, flexible on credit, minimum 20-25% equity required.
10.99%-15.99%, terms 12-24 months. Rates vary by MIC based on their risk profile and cost of capital.
Borrowers who need private lending but want a more institutional approach with clearer terms and processes.
How mortgage brokers access all tiers
A licensed mortgage broker has access to lenders across all four tiers and can match your specific situation to the right lender. A broker assesses your full financial picture — not just credit score — and submits your file to the lenders most likely to approve. Because brokers work with multiple lenders, they can also help you plan a roadmap from your current tier to prime lending over time. This multi-tier access is one of the most valuable services a broker provides, since individual banks only offer their own products and cannot help you find solutions outside their tier.
Moving between tiers
The goal for most borrowers is to start at the tier that works for their current situation and move toward prime lending over time. A typical journey: start with a private or B lender mortgage when credit or income is challenged, make all payments on time for 12-24 months (which is reported to credit bureaus and improves your score), refinance into a prime lender when your credit score crosses 650 and your income is well documented. A broker can create a detailed roadmap from your current tier to prime lending, including specific steps, expected timelines, and target rates at each stage.
