Lenders

So, who is actually giving out these mortgages to home buyers? Mortgage lending in Canada is done by a variety of financial institutions including, but not limited to, banks, credit unions and unregulated lenders. 

Lenders fall into two major categories. 

• Lenders in the higher credit quality mortgage market offer a variety of mortgage products, often with competitive low mortgage rates.  

• The ‘B’ lenders specialize in customers that do not qualify for prime, or A, quality mortgages.  B lenders (aka: Sub-Prime Lenders) charge higher interest rates and usually require larger down payments from their customers.  B mortgages tend to have terms of only 1 or 2 years. Usually, the objective for the borrower is to make their mortgage payments and improve their credit score, allowing them to potentially qualify for a prime mortgage once their B mortgage matures.