Alternative (B-Lender) Mortgages
Why alternative lenders exist, how they price, and who they're built for.
Where B-lenders fit
Alternative or B-lenders sit between prime banks and private lenders. They underwrite with more flexibility than banks — accepting stated income, bruised credit, and non-standard properties — but at lower rates than private money. Most B-lender mortgages run 5.5%–7.5% with a 1% lender fee on shorter terms.
Who qualifies for B-lender financing
Typical B-lender clients include: self-employed with under-reported tax income, newer immigrants without 2-year Canadian credit history, recently discharged bankruptcy or consumer proposal, borrowers with previous mortgage arrears, and buyers of non-standard properties (rural, mixed-use, oversize acreages).
Documentation expectations
B-lenders accept stated income but still want a story: 6–12 months of business bank statements, a CRA Notice of Assessment confirming no arrears, and corporate financials if incorporated. For credit-impaired files, plan to explain each derogatory item in writing.
The cost difference vs prime
Rate-wise, a B-lender typically costs 1.5–2.5% more than a prime bank on the same file. On a $500,000 mortgage, that's roughly $7,500–$12,500 more per year in interest. The trade-off is real — but for self-employed buyers, the alternative is often no mortgage at all.
Moving back to prime
Most B-lender files are designed with a 1- or 2-year exit to prime in mind. Once credit rebuilds, tax returns normalize, or income sources season, Jay re-shops the file to A-lenders to capture savings. The transition is usually seamless when planned at the original placement.
Have questions about your situation?
Every mortgage file has its own story. A 15-minute call with Jay is enough to know your real options.