A consumer proposal is not the end of your homeownership dreams. It is a reset — a legal process that lets you settle debt for less than what you owe and avoid bankruptcy. But the question I hear constantly is: can I still get a mortgage?
The answer is yes, but the timeline, lender options, and requirements depend entirely on how long ago your proposal was filed or discharged, and what you have done since then to rebuild credit.
In Calgary, where there is no land transfer tax and a competitive mortgage market, getting approved after a consumer proposal is more accessible than in many other Canadian cities. This guide walks through exactly what you need to know.
What Is a Consumer Proposal?
A consumer proposal is a legally binding agreement between you and your creditors to repay a portion of your debt over a period of up to 5 years. It is administered by a Licensed Insolvency Trustee (LIT) and governed by federal law.
Key features:
- You propose to pay creditors a percentage of what you owe (often 25% to 50%)
- Payments are spread over a maximum of 5 years
- Interest stops accruing once the proposal is filed
- Creditors cannot contact you or take legal action once the proposal is accepted
- You keep your assets (house, car, RRSPs)
Example:
- Total unsecured debt: $80,000 (credit cards, lines of credit, personal loans)
- Consumer proposal: Pay $24,000 over 4 years ($500/month)
- Once completed, remaining $56,000 is legally forgiven
A consumer proposal shows on your credit report for 3 years after you complete all payments, or 6 years from the filing date, whichever comes first.
Consumer Proposal vs Bankruptcy: Mortgage Implications
From a mortgage perspective, a consumer proposal is significantly better than bankruptcy.
Consumer Proposal Timeline to Mortgage Approval
- During the proposal (payments still being made): Private lenders only
- Discharged less than 12 months: Some B-lenders, most require 12+ months
- Discharged 12 to 24 months with rebuilt credit: Most B-lenders
- Discharged 24+ months with strong credit: A-lenders start to become accessible
Bankruptcy Timeline to Mortgage Approval
- Undischarged: Private lenders only, very limited options
- Discharged less than 2 years: B-lenders, typically requiring 20%+ down
- Discharged 2 to 4 years: B-lenders with improving terms
- Discharged 4+ years: A-lenders possible with strong credit rebuild
Bottom line: A consumer proposal gets you back to prime lending faster than bankruptcy, and during the proposal process, you have more financing options.
Mortgage Options During an Active Consumer Proposal
If you are currently making consumer proposal payments (not yet discharged), your mortgage options are very limited but not zero.
Private Lenders
Private lenders care primarily about equity, not credit history or insolvency status. If you have a strong down payment or significant equity in a property, private lenders will finance you.
Requirements:
- Minimum 25% to 30% down payment or equity
- Property must have marketable value
- You must demonstrate ability to make mortgage payments (employment letter, bank statements)
Costs:
- Interest rates: 8% to 12%
- Lender fees: 3% to 4% of mortgage amount
- Term: 1 to 2 years
When this makes sense:
- You are currently renting for $2,200/month and have $100,000 saved
- You can buy a $400,000 condo with 25% down and a private mortgage at 10%
- Your payment will be approximately $2,750/month, but you are building equity
- Your consumer proposal will discharge in 14 months, at which point you refinance into B-lender financing at 6.5%
When this does not make sense:
- You are financially stretched and cannot afford payments 30% to 50% higher than rent
- You have no clear timeline for proposal discharge or credit rebuilding
- You are using a private mortgage to speculate on property appreciation with no exit strategy
Credit Union Exceptions
A small number of credit unions in Alberta will consider mortgages for borrowers in active consumer proposals if:
- You have been making proposal payments for 12+ months with a perfect track record
- You have at least 10% to 15% down payment
- You have stable employment and income
- The trustee provides a letter confirming your payment status
These are rare, but they exist. Rates are typically higher than prime (6% to 7.5%) and you will need a larger down payment than a conventional mortgage requires.
Mortgage Options After Consumer Proposal Discharge
Once you complete all your consumer proposal payments, you receive a Certificate of Full Performance. This is your discharge. From this point forward, your mortgage options improve significantly based on how much time has passed and how well you rebuild credit.
0 to 12 Months Post-Discharge
Lender options: B-lenders and private lenders
B-lender requirements:
- Minimum 10% to 15% down payment (some require 20%)
- Credit score of 600+ (rebuilt credit, not just the proposal falling off)
- At least two active credit accounts with 6+ months of perfect payment history
- Stable employment (12+ months in current job or 24+ months in same field)
Interest rates: 6.0% to 7.5%
Lender fees: 1% to 2% of mortgage amount
Example:
- You discharged your consumer proposal 8 months ago
- You have rebuilt credit to a 620 score with a secured credit card and small installment loan
- You have been employed as an electrician for 3 years
- You have $50,000 saved for a down payment
- You are approved by a B-lender for a $450,000 purchase at 6.8% with a 1.5% lender fee
12 to 24 Months Post-Discharge
Lender options: Most B-lenders, improved terms
At this stage, the waiting period concerns from most B-lenders are satisfied. Your approval is now primarily about income, down payment, and rebuilt credit score.
Requirements:
- Credit score 620+
- 10% down minimum (5% down available from some lenders if you meet specific criteria)
- Two credit accounts with 12+ months perfect payment history
- Stable income meeting debt service ratios
Interest rates: 5.5% to 6.8%
Lender fees: 1% to 1.5%
Key advantage at this stage: More lender competition means better rates and terms. You are no longer a "tough deal" — you are a standard B-lender client.
24+ Months Post-Discharge
Lender options: A-lenders start to become accessible
Once you are 24 months past discharge with strong rebuilt credit (680+ score), some A-lenders will approve you. Not all — some banks have strict policies requiring 4+ years post-insolvency — but enough that you can start accessing prime rates.
Requirements:
- Credit score 680+
- Two years of perfect payment history post-discharge
- Standard down payment requirements (5% to 20% depending on purchase price)
- Clean income and employment verification
- No other credit issues since discharge
Interest rates: 4.5% to 5.5% (prime rates)
Lender fees: None (standard A-lender mortgage)
Credit Rebuilding After Consumer Proposal: The Game Plan
Your ability to get a mortgage after a consumer proposal is directly tied to how aggressively and intelligently you rebuild credit. Here is the exact playbook I give clients.
Month 1: Secured Credit Card
As soon as your consumer proposal is filed (you do not need to wait for discharge), apply for a secured credit card.
How it works:
- You deposit $500 to $1,000 with the lender
- They give you a credit card with a limit equal to your deposit
- You use it for small purchases and pay the balance in full every month
- After 12 to 24 months of perfect payments, they return your deposit and convert it to an unsecured card
Recommended providers:
- Home Trust Secured Visa
- Capital One Secured Mastercard
- KOHO prepaid card (reports to credit bureaus)
Usage strategy:
- Charge $100 to $200 per month (gas, groceries, Netflix)
- Pay the full balance every month before the due date
- Never carry a balance — utilization above 30% hurts your score
Month 6: Second Credit Product
After 6 months of perfect secured card payments, add a second credit product. This could be:
- A second secured credit card from a different issuer
- A small RRSP loan ($1,000 to $2,000 from a credit union, paid back over 12 months)
- A credit-builder loan from Refresh Financial or Borrowell
Why two products matter: Mortgage lenders want to see at least two active credit accounts (a "2-1-2 rule": 2 years since insolvency, 1 re-established credit product minimum, but realistically you need 2 products).
Month 12: Credit Score Check and Strategy Adjustment
Pull your credit report from Equifax and TransUnion (free through Borrowell or Credit Karma). Check:
- Is your consumer proposal status accurate?
- Are both credit accounts reporting?
- What is your score?
Target score by 12 months post-discharge: 620 to 650
If your score is lower:
- Check for errors and dispute them
- Ensure all accounts are reporting correctly
- Reduce credit utilization if above 30%
Month 18 to 24: Mortgage Pre-Approval
At this stage, you should have:
- 18 to 24 months since consumer proposal discharge
- Credit score of 640+
- Two credit accounts with perfect payment history
- Stable income and employment
This is when you approach a mortgage broker for pre-approval. Even if you are not ready to buy yet, getting pre-approved tells you:
- Which lenders will approve you
- What rate and terms you qualify for
- How much you can afford
- What (if anything) you still need to improve
Down Payment Requirements After Consumer Proposal
Down payment requirements are higher after a consumer proposal, especially in the first 24 months post-discharge.
First 12 Months Post-Discharge
- B-lenders: 10% to 20% down
- Private lenders: 25% to 30% down
12 to 24 Months Post-Discharge
- B-lenders: 5% to 10% down (some allow 5%, most want 10%)
24+ Months Post-Discharge
- A-lenders: 5% to 20% down (standard rules apply)
Where the down payment comes from:
- Savings during the consumer proposal period (many people save aggressively once debts are consolidated)
- Gift from family (requires gift letter)
- RRSP through Home Buyers' Plan (if you have RRSPs that were protected during the proposal)
- Sale of assets
You cannot use borrowed money for down payment. Some people think they can take a loan or use a line of credit for the down payment. Lenders will catch this when they review your bank statements, and it will kill your approval.
Employment and Income Requirements
Consumer proposal or not, you still need to meet standard income and employment requirements for mortgage approval.
Employment Stability
B-lenders typically require:
- 12+ months in your current job, OR
- 24+ months in the same field/industry (even if you have changed employers)
Why this matters after consumer proposal: If you filed a consumer proposal, changed jobs twice, and have inconsistent income, lenders see too much instability. If you filed a consumer proposal but have been in the same electrician job for 6 years, lenders view you as stable despite the proposal.
Income Documentation
Employed (T4 income):
- Recent pay stubs (30 to 60 days)
- Employment letter
- Past 2 years of T1 Generals and Notices of Assessment
Self-employed:
- 2 years of personal tax returns
- 2 years of business financial statements (if incorporated)
- Notice of Assessment for both years
- Some B-lenders offer stated income programs for self-employed borrowers, but these typically require higher down payments (20%+)
Calgary-Specific Advantages After Consumer Proposal
No Land Transfer Tax
In Ontario, buying a $450,000 home costs $5,725 in land transfer tax. In Calgary, it costs zero. This means more of your saved capital goes toward the down payment, which is critical when you are trying to meet the 10% to 20% down requirement post-proposal.
Strong Rental Market
If you cannot qualify for a mortgage immediately post-proposal, Calgary's rental market offers relatively affordable options while you rebuild credit. Average one-bedroom rent is $1,500 to $1,700, which is manageable while saving for a down payment.
Competitive B-Lender Market
Alberta has a strong network of B-lenders and alternative lenders who understand consumer proposals and work with post-insolvency borrowers regularly. You are not an anomaly — you are a standard deal for these lenders.
Real Example: Consumer Proposal to Homeownership in Calgary
Background:
- Sarah filed a consumer proposal in January 2021 for $65,000 in credit card debt
- Proposal payments: $600/month for 48 months
- Discharged: January 2025
- Occupation: Registered nurse, employed 7 years
- Savings: $48,000
Credit rebuilding:
- Secured credit card opened February 2021, perfect payment history
- Small credit union loan opened August 2021, paid off March 2023
- Credit score at discharge: 635
Mortgage application (February 2025, 1 month post-discharge):
- Pre-approved with B-lender
- Purchase price: $430,000
- Down payment: $43,000 (10%)
- Mortgage amount: $387,000
- Interest rate: 6.5%
- Lender fee: 1.5% ($5,805 added to mortgage)
- Monthly payment: $2,650
Exit strategy:
- After 24 months of perfect mortgage payments and continued credit rebuilding, refinance with A-lender at 4.9%, reducing payment to $2,380/month
This is a real-world scenario that plays out regularly in Calgary. Consumer proposal to homeownership in 4 years is absolutely achievable with discipline and planning.
Common Mistakes After Consumer Proposal
Mistake 1: Waiting Too Long to Rebuild Credit
Some people think they should wait until the consumer proposal falls off their credit report (3 years post-discharge) before applying for credit. This is backwards. You need to rebuild credit immediately so that by the time the proposal falls off, you have 3+ years of perfect payment history.
Mistake 2: Applying for Too Much Credit Too Fast
Applying for 5 credit cards in one month to "rebuild faster" destroys your score with multiple hard inquiries. Be strategic: one secured card, wait 6 months, add a second product.
Mistake 3: Carrying Balances on Rebuilding Credit
Using a secured credit card to carry a $900 balance on a $1,000 limit (90% utilization) tanks your score. Use the card, pay it off in full every month.
Mistake 4: Not Checking Credit Reports for Errors
Consumer proposal discharge information does not always get reported accurately. If your report shows the proposal as "active" when it was discharged 18 months ago, this kills your mortgage application. Check your credit report regularly and dispute errors.
FAQ: Consumer Proposal and Mortgages
Q: Will my consumer proposal prevent me from getting a mortgage forever? A: No. It impacts you most in the first 12 to 24 months post-discharge. After that, with rebuilt credit, you have access to most lenders.
Q: Can I get a mortgage while still making consumer proposal payments? A: Yes, through private lenders if you have 25%+ down. Some credit unions may also consider you with 12+ months of perfect proposal payments.
Q: Does a consumer proposal affect my spouse's ability to get a mortgage? A: If you apply jointly, yes. If your spouse applies solo (and has sufficient income to qualify alone), your consumer proposal does not impact their application.
Final Thoughts
A consumer proposal is a smart financial decision for people drowning in high-interest debt. It gives you a path to financial stability without the severe consequences of bankruptcy. And from a mortgage perspective, it is far from a permanent barrier.
In Calgary, with no land transfer tax, competitive lending options, and strong B-lender availability, getting approved for a mortgage 12 to 24 months post-discharge is very realistic. The key is rebuilding credit immediately, maintaining employment stability, and saving aggressively for a down payment.
If you are in a consumer proposal or recently discharged, start the credit rebuilding process today. Every month of perfect payment history moves you closer to mortgage approval.
For more information on alternative lending options and deal rescue strategies, see the Complete Guide to Mortgage Deal Rescue in Calgary.
Questions about getting a mortgage after a consumer proposal? Contact Jay: jaysinghmortgage@gmail.com or 403.409.1126.
