Immigrant Buyers in Canada Facing 8.5%+ Mortgage Rates with B-Lenders

Despite some relief in mainstream mortgage rates this summer, a growing number of immigrant homebuyers are finding themselves stuck with much higher borrowing costs. According to recent broker insights, many newcomers to Canada are being funneled toward B-lenders, where mortgage rates often exceed 8.5% due to tightened lending standards and limited credit history.

B-lenders, which include alternative mortgage providers like trust companies and credit unions, are typically sought when traditional banks reject a borrower. For new immigrants without established Canadian credit, full-time job history, or permanent resident status, securing a mortgage from A-lenders like RBC or Scotiabank has become increasingly difficult in 2025.

Why Immigrants Are Struggling With A-Lenders

Brokers report that even well-qualified professionals on work permits or recently obtained PR cards are being told they don’t meet the stricter GDS/TDS thresholds enforced by big banks. Most A-lenders are also cautious about approving buyers with foreign income or insufficient down payment documentation.

“It’s not that these borrowers aren’t creditworthy,” said one Ontario-based broker. “It’s that the banks’ automated systems don’t know how to assess them fairly.”

What This Means for Borrowers

Once redirected to B-lenders, immigrants often face significantly higher mortgage rates (8.5% and above), shorter terms, and lender fees of 1% or more. While some B-lenders offer flexibility on documentation, the cost of borrowing remains a huge barrier. On a $500,000 mortgage, the difference between a 4.9% rate and an 8.5% rate translates to nearly $900 more per month.

Despite that, many buyers are going ahead with the purchase, either due to urgency to settle in Canada or to avoid rising rent costs. However, brokers are warning clients to understand all fees, penalties, and renewal risks before signing with B-lenders.

“For many newcomers, alternative mortgage lenders—also known as B-lenders—are often the only path to homeownership despite higher rates.”

Provincial Breakdown: Who’s Most Affected?

Immigrants in Ontario and British Columbia are among the most affected, given the high home prices and tougher mortgage qualification criteria in urban centres. In provinces like Alberta or Saskatchewan, where homes are more affordable, some newcomers are still managing to qualify with A-lenders.

“To fully understand your financing options, it helps to know how A-lenders, B-lenders, and private lenders differ in Canada’s lending landscape.”