A consumer proposal does not stop you from getting a mortgage. It closes the bank door and narrows the B-lender door. Most banks will not refinance during a proposal, and some will not renew. B-lenders such as Home Trust, Equitable and Haventree usually lend at 6.5-9% once the proposal is paid, and sometimes while it is active if you have 25%+ equity. Private lenders lend on equity regardless, at 8-13% plus fees, for 12 months. Paying out the proposal with a private second starts the credit-rebuild clock sooner but swaps an interest-free debt for a 12% one. It saves money only in specific cases. We show you both numbers before you decide.

Can I renew my mortgage with a consumer proposal?

Often, yes. If your mortgage payments have been clean, many lenders renew without re-qualifying you. But renewal is at the lender's discretion, and some lenders decline when they see an active proposal. The commonest call we get: "The bank won't renew because of the proposal, and it matures in three weeks." Then you need a new lender before maturity. That means a B-lender if the proposal is older and the equity is strong, or a 12-month private first if not. Step one is a letter from your Licensed Insolvency Trustee confirming the proposal is in good standing and the payout balance. Every lender asks for it.

Pay out the proposal with equity, or keep paying it? Both columns

A homeowner in Brampton. $31,000 left on the proposal, 38 months to go at $815 a month. A $540,000 first mortgage at 4.9%. House worth $840,000.

	Keep paying the proposal	Pay it out with a $45,000 private second
Monthly outlay	$815 to the trustee	$450 interest-only at 11.99%
Cost over the next 12 months	$9,780 (all principal, interest-free)	$5,400 interest + $4,100 fees = $9,500; principal unchanged
Debt left after 12 months	$21,220 on the proposal	$45,000 on the second
Credit report	R7 until paid, then 3 years from completion (TransUnion) or 3 years from filing (Equifax, max 6)	"Completed" reported now; the clock starts about 26 months earlier
B-lender refinance	Possible at 25%+ equity with some lenders; easier after completion	Usually possible at month 12 once two trade lines are rebuilt
When this column wins	You can carry the $815 and nobody is refusing to renew	The bank is refusing to renew, or a B-lender refinance in 12 months is realistic and saves more than the fees

The trustees are right: swapping a 0% proposal for a 12% second rarely saves money on its own. It wins when the proposal is the thing blocking a refinance you need anyway, or when the renewal is being refused. We run both columns on your numbers and put the result in writing.

What each lender type does with a proposal, November 2026

	Bank	B-lender	Private
Active proposal, refinance	No	Sometimes, 25%+ equity, paid out from proceeds	Yes, to 75% LTV
Active proposal, renewal	Often yes if payments are clean; not guaranteed	Yes, case by case	Yes
Completed under 2 years ago	Usually no	Yes, 6.5-9%	Yes, but a B-lender is cheaper
Completed over 2 years, two clean trade lines	Yes	Yes	Not needed
Rate	4.5-5.5%	6.5-9% + 1% fee	8-13% + 2-3% fees

Province notes

BC

Proposals are federal, so the rules are the same. Lower Mainland equity often makes the B-lender route work during the proposal. BC page.

Alberta

Lower values mean the equity test bites harder. A private second to pay out a proposal is most used in Calgary and Edmonton where the first is small and cheap. Alberta page.

Ontario

Trustee-arranged lump-sum proposals funded by a private second are common in the GTA. FSRA's two-business-day borrower disclosure applies. Only a Level 2 agent or broker may arrange it. Ontario page.

The 12-24 month path back

Month 0. Trustee letter. Payout or renewal funded. Two secured or starter credit cards opened and used lightly.
Months 1-12. Every payment on time, including the private mortgage. Utilisation under 30%. Tax returns filed.
Month 9. We pull credit and test the file with two B-lenders.
Months 10-12. B-lender refinance pays out the private mortgage. Typical rate 6.5-8%, 1-2 year term.
Months 24-36. With the proposal reported as completed for two years and a 650+ score, bank renewal or refinance.

Consumer proposal mortgage questions

Can you get a mortgage while in a consumer proposal?

Yes, from a private lender on equity, and sometimes from a B-lender with 25%+ equity where the proposal is paid from the proceeds. Banks: realistically no. The rate depends on which of those doors is open.

Will a private mortgage annul my proposal?

No. A proposal is annulled by missing three payments, not by taking secured credit. Your trustee must be told, and most lenders want the trustee's letter anyway. If the second pays the proposal out, the trustee issues a certificate of full performance.

How soon after a proposal can I get a B-lender or bank mortgage?

B-lenders: often right after completion, at 6.5-9%, with 20-25% equity. Banks: usually two years after completion with two re-established trade lines and a 650+ score.

My bank will not renew. Can you really do this in three weeks?

Usually, yes. Commitment in 1-2 business days, appraisal in 2-5, lawyers in 5-10, funding on or before maturity. Call the day you get the non-renewal letter, and ask your bank in writing for a short extension while the refinance is arranged.

Is it better to just finish the proposal?

If you can carry the payment and nobody is refusing to renew you, usually yes. The proposal is interest-free. Pay it out with equity only when it unlocks a refinance you need, and only after seeing both columns on your own numbers.

Sources. Hoyes Michalos, "Second mortgage or interest-free consumer proposal?" and "Can you get a mortgage after a consumer proposal?" · Farber, proposals and mortgage renewal · Office of the Superintendent of Bankruptcy · Equifax and TransUnion reporting periods · FSRA private mortgage consumer scenario · Mortgage Directory private rates, October 2026.

Real people, not a call centre

Talk it through with a licensed broker before you decide

Tell us what is going on in a few lines. We call you back the same day with what lenders will say, what it costs in dollars, and how you get back to a bank. If private is the wrong tool, we say so.