In a consumer proposal or past a bankruptcy? Which Ontario lenders will look at you, paying a proposal out early, and how long until the banks will.
Quick answer: You can often refinance while still in a consumer proposal — usually with an alternative or private lender — to pay it out early, and bank lenders typically come back about two years after you finish or are discharged, once your credit is rebuilt. Paying out a proposal costs money because proposals carry no interest; the benefit is time.
A consumer proposal or bankruptcy doesn't end your options as a homeowner, but it changes which lenders will talk to you and on what terms. The most useful question is where you are in the process.
We're mortgage brokers, not Licensed Insolvency Trustees. If you haven't filed yet, talk to us before you sign anything: with real home equity, a refinance can sometimes avoid a proposal altogether.
A consumer proposal charges no interest, so paying it off early with borrowed money always costs something. What you buy is time. On Equifax, a proposal is removed three years after you complete it, or six years after you filed, whichever comes first, so finishing early can bring that date forward. TransUnion's timing can differ.
Once the trustee confirms the proposal is paid, ask for the certificate of full performance — lenders will want it. Then start rebuilding straight away with a secured card or small credit account paid on time every month.
Watch your payments: under federal insolvency law a proposal is generally annulled if you fall three payments behind. If that's close, call your trustee before you call a lender.
In an Ontario bankruptcy, home equity above a small provincial exemption generally becomes available to creditors through the trustee, which is why homeowners with equity usually look at a proposal or a refinance first.
After discharge, a first bankruptcy typically stays on your credit report for six to seven years depending on the bureau. Alternative lenders may lend sooner when there's equity; many bank lenders want about two years since discharge plus re-established credit — commonly two active accounts with a clean payment history.
The usual route is an alternative-lender mortgage for one or two years while your credit rebuilds, then a move back to a bank or monoline at renewal. We do this often — it's the same path described on our renewal page, where clients who started with alternative lenders moved back to A-lender rates.
A Midland homeowner owes $340,000 on a bank mortgage at 4.5% with 20 years left. They have 36 payments of $600 left on a consumer proposal ($21,600) and enough equity to pay it out with a small second mortgage until their first mortgage renews.
No new borrowing. The proposal is finished in three years and the credit-report clock starts then.
The proposal is completed now. The second is interest-only and is folded into the first mortgage at renewal.
Rates in this example are illustrations, not quotes. Payments use Canadian mortgage maths (interest compounded semi-annually).
Lenders generally let your total mortgage reach 80% of your home's value when you refinance. Using the MLS® Home Price Index benchmark for a typical home from the Toronto Regional Real Estate Board's August 2026 report:
| Area | Typical home (benchmark) | 80% of value |
|---|---|---|
| Simcoe County (all areas) | $775,100 | $620,080 |
| Barrie | $624,700 | $499,760 |
| Orillia | $504,600 | $403,680 |
| Innisfil | $666,400 | $533,120 |
| New Tecumseth | $761,400 | $609,120 |
| Bradford | $958,400 | $766,720 |
| Collingwood | $625,000 | $500,000 |
| Wasaga Beach | $590,000 | $472,000 |
| Midland | $489,600 | $391,680 |
Subtract what you owe to see your approximate room. Your own appraisal decides the real number. See the full Simcoe County market report.
Often, yes — usually from an alternative or private lender, and usually to pay the proposal out. Your payments need to be current and you need enough equity and income.
Yes, if you have the equity. Because a proposal carries no interest, paying it out early costs money; the benefit is finishing sooner, which can bring forward the date it comes off your credit report and the day bank lenders will consider you again.
Many bank lenders want about two years since discharge, plus re-established credit with a clean payment history. Alternative lenders may consider you sooner when there's enough equity.
On Equifax, three years after you complete it or six years after you filed, whichever comes first. TransUnion's timing can differ.
Not immediately. The proposal stays on your file until its removal date, but completing it lets you start rebuilding with on-time payments — that's what moves your score and your options.
More: Bad credit mortgage approvals in Ontario, When a private mortgage helps — and when it doesn't, Debt consolidation calculator, Refinance break-even calculator, Simcoe County market stats (updated monthly).
Written by the TMC Greater Simcoe mortgage team, Orillia, Ontario. Last updated 2026-10-20. General information, not personal financial, tax or insolvency advice. Book a free consultation: 705-238-1097.