Entering the housing market is among the top goals for Canadians. In fact, the Financial Post reports that 58 per cent of Gen Z and millennials plan to buy a house in the next five years. But, with rising living costs, that dream may feel lofty for some. Here’s what you should know about Canadian mortgages in 2025 before you consider applying.
What Is the Minimum Credit Score to Qualify for a Mortgage?
While there are other factors that may contribute to getting your mortgage approved, your minimum credit score to be approved for a traditional mortgage should be between 620 to 680, according to Loans Canada. Other sources, like Scotiabank suggest that it should be on the higher end of that range, with a minimum score of 680 being their recommendation to get approved. Equifax, on the other hand, considers 660 and above a “good” credit score.
See More: Real Estate Agents Across Canada Share Their 2025 Predictions
What Is the Range of Credit Scores in Canada?
According to the Government of Canada, a credit score is “a three-digit number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money.” In Canada, credit scores range from 300 to 900.
- 550 and lower: Bad
- 560 to 659: Fair
- 660 to 724: Good
- 725 to 759: Very good
- 760+: Excellent
Related: A Complete Guide to Navigating Interest Rates in Canada
Can You Get Approved for a Mortgage With a Low Credit Score?
It’s possible that you may still be considered for a mortgage if you don’t meet those requirements. Some other factors that might impact your mortgage application are:
- Your debt
- Your income
- The mortgage amount and amortization period
- Your employment history
For example, if you have a great income, low debt but a bad credit score, it’s possible that you could still be approved. If you’re having trouble getting approved for a mortgage because of your credit score, consider improving your credit score by reviewing your credit history, applying for a credit card and building your credit history. You can also choose to hold off on applying for a mortgage until your credit is improved, and you’ll likely have more desirable options.
When that’s not possible, there are still other options like having a co-signer for your mortgage, increasing the size of your down payment or considering alternative lenders, such as private lenders.
What Is a Mortgage Stress Test?
In addition to your credit score, you will also need to pass a mortgage stress test. A mortgage stress test is designed by federal bank regulators to ensure that Canadians don’t take on too much debt — so they won’t default on their mortgage payments. To pass the mortgage stress test, applicants must prove that they can afford the mortgage rate, plus two per cent. So, if the current mortgage rate is 5 per cent, you would need to qualify for a mortgage at 7 per cent in order to pass the stress test.
With this information, we’re hoping that you’re armed to apply and qualify for your mortgage in 2025. Ready to buy? Check out the best and worst cities for homebuyers in Canada.
