When someone tells me they've been declined at their bank, the first thing I want to know is whether they've heard of Home Trust, Equitable Bank, or Community Trust.
Most haven't. And most assume that a bank decline means every lender will say no. That's not how the mortgage market actually works.
How the Lending Landscape Is Set Up
The banks and major credit unions (TD, RBC, BMO, First National) are what the industry calls A lenders. Best rates, strictest criteria. Strong credit, stable employment, income that shows up clearly on a tax return. If your file checks those boxes cleanly, you'll likely do well at an A lender.
B lenders are fully regulated financial institutions that specialize in files that don't fit the bank template. Home Trust and Equitable Bank have been around for decades. They move billions in mortgage volume every year. This is not fringe territory.
Then there are private lenders, individuals and private funds lending their own money. Rates typically run 8 to 12 percent with fees on top. Private lending has a place, mostly for short-term bridge situations. But it's not where most people who got declined at a bank belong.
| Lender Type | Who They Are | Best For | Rate Premium |
|---|---|---|---|
| A Lenders | TD, RBC, BMO, First National, major credit unions | Strong credit, stable employment, provable T4 income | Best available rates |
| B Lenders | Home Trust, Equitable Bank, Community Trust | Self-employed, bruised credit, non-traditional income | ~1-2% above A lender + 1% lender fee at closing |
| Private Lenders | Individual investors and private funds | Short-term bridge, unusual property, last resort | 8-12%+ with significant fees |
Who Actually Uses B Lenders
The self-employed borrower whose income looks low on paper because they've been writing off business expenses the right way. The person who had a rough stretch three years ago (a consumer proposal that's been discharged, a couple of collections that have been settled) who is financially solid now but still carries it on their report. The contract worker or commission earner whose income is real but doesn't come in a clean T4.
None of these are risky borrowers. They just don't fit the template that lets banks qualify files quickly. B lenders are built for exactly this.
Credit score thresholds are typically 550-600 versus 680 or higher at most A lenders. And instead of anchoring everything to your NOA, they'll look at bank deposits, business revenue, the overall picture of your financial life. For a lot of people, that difference in approach is everything.
What the Rate Difference Actually Costs
Realistically, 1 to 2 percent above the best A lender rate, plus a lender fee of around 1 percent at closing. On a $600,000 mortgage, that fee is $6,000.
I'm not going to pretend that's nothing. It's real money. But B lender terms are typically one or two years, not five. You're not locked in at a higher rate for a long stretch. And the clients who get the most value out of this understand it as a bridge from day one. Get into the home now, use the term to address what caused the decline, come out the other side in a better position than if you'd waited.
The Renewal Play
When your term ends, I shop the renewal across A lenders. Underwriters at those lenders care about who you are on the application today, not who your last lender was. Improved credit, another year of business history, better documentation. That's what changes the outcome.
I start working on renewal positioning the day the mortgage funds. Not six weeks before it comes due. The clients who do their part during the term make the transition back to an A lender cleanly. Most of them do.
How to Actually Access a B Lender
There's no Home Trust branch you can walk into. B lenders work through mortgage brokers, almost exclusively. How the file is packaged and presented to the underwriter matters. The same borrower can get a different result depending on who put the application together and how well they know the lender.
If you've been declined or you're not sure where you'd land, a 20-minute call usually figures it out. No cost, no obligation.