Can a consumer proposal prevent me from getting a mortgage? 

Find out how a consumer proposal can affect your chances of getting a mortgage to purchase a home. 


Couple looking over mortgage documents with real estate saleswoman

Whether you’re looking to renew your mortgage or you want to buy a new house, the state of your credit can make or break your ability to get financing. If you have good credit, you’ll get the best rates and terms for your loan. If your credit is not so good, you could struggle to get financing or end up paying exorbitant rates from B-list and private lenders.

Find out how filing a consumer proposal can lower your chances of getting the mortgage of your dreams, and get the inside scoop on what you can do to help get your finances back on track.

Marble Fast-Track Loan

Marble Fast-Track Loan


18.99 % APR


  • Build up your credit score
  • Competitive interest rates
  • Loans available to pay out consumer proposals

Marble Fast-Track Loan

Apply today for a credit builder loan and improve your financial health. Borrow anywhere from $2,500 to $15,000. This loan is strictly for borrowers exiting a consumer proposal.

  • APR: 18.99% – 24.99%
  • Loan amounts: $2,500-$15,000
  • Loan terms: 36-84 months
  • Fees: Legal and admin fees of $295 - $1,500 (based on size of loan)
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What is a consumer proposal?

A consumer proposal is a legal agreement that you enter into with a legal representative (also called a Licensed Insolvency Trustee). This agreement forgives a portion of the money you owe and sets a payment schedule that fits your budget. It also gets your creditors off your back, so you can focus on repaying your debt without the added stress of collection calls or legal action.

The major downfall of a consumer proposal is that once it’s accepted, it will bring your credit score down to one of the lowest scores possible (an R9). This is the same score that you’d get if you filed for bankruptcy. Once you wipe out your consumer proposal, a note will remain on your account for up to three years stating that you had one. This will continue to affect your credit and make it more difficult to qualify for loans, mortgages and other forms of credit.

What is a consumer proposal?

Compare credit builder loans

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
Marble Fast-Track Loan
18.99% – 24.99%
36-84 months
Legal and admin fees of $295 - $1,500 (based on size of loan)
Marble Financial offer credit builder loans in amounts from $2,500 to $15,000. Improve your financial health within 36 months. This loan is strictly for borrowers exiting a consumer proposal.
Refresh Financial Credit Builder Loan
3-5 years
No administration or origination fees.
No funds are provided by Refresh upfront. Instead, funds are placed into a secured account to be accessed later. Your payments are reported to the credit bureaus, potentially impacting your credit score.

Compare up to 4 providers

Will a consumer proposal affect my current mortgage?

Filing for a consumer proposal typically won’t cause any issues with your current mortgage if you managed to get approved for financing when your credit was in good standing. The silver lining is that most lenders won’t check your credit in the middle of your term or when it comes time to renew your mortgage as long as you’ve made all of your payments on time.

This means that you probably won’t experience any negative effects (like mortgage cancellation) because your current lender won’t know your credit score has dropped. That said, you may have difficulty getting approved if you decide to switch lenders or refinance your mortgage with your current lender since this will prompt them to check your credit report.

Will I be able to apply for a new mortgage with a consumer proposal?

You may have more difficulty applying for a new mortgage if you’ve recently filed for a consumer proposal. This is because any lender that’s going to assess your application for a loan will check your credit score. If they see that your score is hovering between an R9 and R7, they will be much less likely to want to finance you.

If you want the best chance of getting a mortgage, you should apply with a private lender or B-list lender as most big banks won’t lend money to customers with bad credit. Your best bet to get started is to approach a mortgage broker that can curate a list of lenders that might be willing to finance you.

What do lenders consider when financing your mortgage?

Lenders will typically look at three main factors when deciding whether they want to qualify you for a mortgage.

  • Income. Your lender will usually take your income into consideration when assessing your eligibility for a mortgage. If you have a high income and a long history of consistent employment, you’ll be more likely to get approved.
  • Debt-to-income ratio. The amount of debt you carry in relation to your income will also factor into your loan decision. You’ll be more likely to get financing if you carry a low balance on your credit cards and don’t owe a lot for loans and other forms of credit.
  • Credit score. One of the biggest factors in whether you get approved for a mortgage will be your credit score. The higher your score is, the more likely you’ll be to get approved.

How can I improve my credit score after a consumer proposal?

There are a number of actions you can take to help improve your credit score after you pay off your consumer proposal:

  • Make on-time payments. You can help improve your credit score quickly by making all of your payments on your outstanding loans and credit cards on time.
  • Apply for a credit-builder loan. You might be eligible to get a credit-builder loan, which will report all your on-time payments to the credit bureau to build your score faster.
  • Get a secured credit card. You can secure your credit card with a cash deposit so that you can start to build credit when you make everyday purchases. Compare secured credit cards here.
  • Keep your old accounts open. If you have a solid repayment history on a credit card or loan, you should keep your account open to build up your score.
  • Review your credit report. It pays to check your credit report for errors to make sure that you’re not getting points deducted for incorrect data.
  • Access credit counselling. It could be a good idea to book an appointment with a credit counsellor if you want to find a more sustainable debt solution.

Bottom line

Filing for a consumer proposal typically won’t affect your current mortgage, but it can hurt your chances of getting a new one. You may also have difficulty renewing or refinancing your mortgage when you’re struggling with this kind of debt. Find out more about how a consumer proposal can affect your mortgage, and how you can improve your credit score to increase your chances of qualifying for financing.

Frequently asked questions about consumer proposals

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