Definition
A B-lender mortgage (or "alternative mortgage") is a loan granted by a non-bank lender specialized in files that do not meet the strict criteria of A lenders (Big 6, Desjardins, credit unions). In Québec, leading B lenders include Home Trust, Equitable Bank, Community Trust, and several private lenders supervised by an AMF-licensed broker.
Typical profiles eligible for B: self-employed with low declared income, newcomer with no Canadian credit history, recovery from bankruptcy, TDSR/GDSR ratios above OSFI thresholds, atypical properties (cottage, plex, agricultural land). Minimum down payment is often 20% and documentation remains rigorous.
Pricing: rate typically 1.5 to 3% above the A market, plus origination fees of 1 to 2% of the loan ("lender fee") and potential broker fees. A B-lender mortgage is almost always conceived as a temporary solution (1-2 year term) to rebuild the file, then transfer to an A lender at renewal.