How credit affects your Mortgage Qualification


To qualify for the best available mortgage rates, it’s important to have a strong credit score. A credit score of 680-700 or above is required to qualify for the best mortgage rates in Canada in 2021. Some mortgage providers allow you to qualify with credit scores between 600 and 680, but these providers may charge higher interest rates.

You may be wondering why lenders in Canada care so much about your credit score. Mortgages represent a large sum of money for lenders. Just like you wouldn’t lend money to a complete stranger, a lender isn’t going to lend you a large sum of money without vetting you first. Your credit score is one of the main ways that lenders vet you for your creditworthiness.

A good credit score shows lenders your ability to pay bills on time. The higher your score, the more likely that lenders are willing to work with you. A good credit score can also help you qualify for better mortgage rates, which will help you save more money on your mortgage payments. The interest rate you receive on your mortgage matters, as even a slightly lower interest rate can have a major impact on what you pay in interest.

What should my credit score be to get the best mortgage rates?

Here’s a brief overview of what your credit score looks like to lenders and mortgage brokers. The higher your credit score, the better rates you can qualify for.

741 or more: Wow – your credit score is excellent! This is where the best mortgage rates live.

713 to 740: You have a good credit score. You should receive a very good interest rate on your mortgage and have plenty of options.

660 to 712: This is considered a fair credit score by lenders. However, once you get to 660, you’ll be entering average credit score territory.

575 to 659: In the eyes of banks and lenders, this is a below-average credit score. If your credit score is below 640, you might have trouble getting a conventional mortgage from a bank or online lender. Consider working on improving your credit score before applying for a mortgage.

300 to 574: Your credit score is poor and needs improvement, but that’s OK. As your credit stands right now, you’d be considered a high-risk borrower. Even if you’re approved for a mortgage, you would end up paying extremely high interest rates. You should make an effort to improve your credit score in order to access better mortgage rates in the future.

For every 20-point increment that your credit score drops, you’ll likely see small changes in the interest rate you’re offered. Lenders typically adjust their offer rates each time your credit score moves up or down by 20 points.


Having a credit score of 680 or above gives you the best shot at qualifying for the lowest mortgage rates in Canada. If your credit score is between 600 and 680, you may still have mortgage options available to you, but they may be at higher rates. If you’re not in a rush to find your new home, we recommend taking steps to build and improve your credit score, especially if you have a zero credit score. By doing so, you can set yourself up powerfully for the future to qualify for the best mortgage rates, save money, and pay off your mortgage sooner.