When it comes to getting a mortgage, many people are surprised to learn that there isn’t just one type of lender. In Canada, borrowers have access to three main lending categories: A lenders, B lenders, and private lenders. Each serves a different purpose and comes with its own guidelines — including different minimum down payment requirements.

Whether your credit is excellent, needs improvement, or your situation is unique, there is almost always a solution. Here’s a simple breakdown of how each type of lender works.

A Lenders (Prime Lenders)

These are Canada’s major banks and top financial institutions. A lenders offer the best interest rates, but they also have the strictest qualification rules.

A Lenders are ideal if you have:

• Strong credit

• Stable, provable income

• Low debt ratios

• A clean financial history

Minimum Down Payment:

✅ As low as 5% (up to the allowable limits)

A lenders are the “traditional” mortgage route — perfect for clients who meet the standard guidelines and want the best rates.

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B Lenders (Alternative Lenders)

B lenders help clients who don’t quite fit the A-lender box but are still solid, reliable borrowers.

B Lenders are a great fit when:

• You are self-employed

• Your credit is bruised or recovering

• Your income is harder to verify

• Your debt ratios are higher

They offer more flexible approvals and focus on the story behind your numbers.

Minimum Down Payment:

✅ 20%

B lenders allow many clients to qualify even when banks say no, offering a fair middle ground with more flexible guidelines.

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Private Lenders

• Private lenders offer the most flexible solutions and are typically used for short-term, unique, or urgent situations.

  Private Lenders are helpful when:

  • You need very fast financing

  • Your situation doesn’t fit A or B guidelines

  • You’re transitioning between financing solutions

  • Equity is stronger than income or credit

  Private lenders mainly focus on the property’s equity, not your credit score or income.

  Minimum Down Payment:

  ✅ 25% (sometimes more depending on the property)

  Their approvals are fast and straightforward, making them a great temporary option.