New Glasgow: declined after a consumer proposal, B-lender

Illustrative example

The situation

Location

New Glasgow, Pictou County

Borrower

A single borrower, salaried, 14 months past a consumer proposal

Income

$71,000, one salaried job at a Pictou County manufacturer, six years with the employer

Credit

Rebuilding: a secured card and a car loan, 14 months reporting, no late payments; the proposal still shows on the report

Purchase price

$295,000

Down payment

$59,000

Mortgage

$236,000

Payment at 4.45%

$1,300 a month

The challenge

A consumer proposal filed in 2024 and completed 14 months ago, with the certificate of full performance in hand. Since then, a secured card and a small car loan, both paid on time. The bank looked at the discharge date rather than the payments since and declined; its policy wanted two years. The house, a $295,000 bungalow on the west side of town, would not wait.

What the lender looked at

• The certificate of full performance, and every payment since: B-lenders read the file from the discharge date forward and want the trade lines reporting clean.
• Two active trade lines reporting for at least twelve months; here a secured card and a car loan, 14 months old, no missed payments.
• Uninsured, so 20% down, $59,000, from the borrower’s own savings and traceable over 90 days; a gift letter would have been accepted for part of it.
• Stress-tested like any federally regulated lender: $1,574 a month at 6.45%, 33% gross debt service on $71,000.
• Fees: the lender fee comes off the advance, and under Section 22 of the Standards of Conduct for Mortgage Brokerages Regulations no broker fee can be collected until funding is confirmed and the commitment accepted, both in writing.

What was done

The file was placed with a B-lender on a one-year term at 20% down, with the lender fee disclosed in writing before signing and deducted from the advance. The term was chosen so that by renewal the two trade lines would show 24 months of clean history since the proposal, the threshold most A-lenders apply, and the mortgage could be switched at maturity with no penalty.

The outcome

Illustrative outcome: a $236,000 mortgage; at 4.45% (chartered-bank prime rate, Bank of Canada, 2026-09-16) that is about $1,300 a month, shown at the example rate for comparison, since a B-lender prices above it and states its rate in the commitment. Cash on closing: $61,950 for the down payment and deed transfer tax, plus legal fees, with the $2,360 fee coming off the advance.