Crossing 680: what your credit score changes on a mortgage

Direct answer. In Canada, a credit score moves mortgage outcomes in steps, not smoothly. Insurers set a floor of 600 for at least one borrower; 680 is Sagen's recommended minimum on its insurable tier and a common prime-lender cut-off. Above a threshold, pricing follows insurance status and loan-to-value, not score. Below it, the lender category changes.

Canadian credit scores run from 300 to 900, produced by two bureaus, Equifax and TransUnion, from the contents of your credit report. The Financial Consumer Agency of Canada's own description is the one to hold onto: the score you see may differ from the score a lender sees, because a lender may weight the underlying information differently when it calculates its own.

That sentence does more work than it looks like. There is no single number that is "your credit score." There is a bureau score you can pull, a second bureau's score that may differ, and a lender's internal model that consumes the report and produces its own figure. When a mortgage decision turns on a threshold, the number being tested is usually the lender's or insurer's read of the bureau file, not the one on your banking app.

Three regimes govern a Canadian residential mortgage, and each treats the score differently.

Insured mortgages (down payment under 20%). Default insurance is mandatory, and the insurers publish their floors. CMHC's current homeowner requirement is a minimum score of 600 for at least one borrower, with gross and total debt-service maximums of 39% and 44% applying uniformly. Sagen's Homebuyer 95 program states the same 600 floor for loans above 80% loan-to-value. The insurer, not the lender, sets this gate.

Insurable mortgages (20% or more down, but insured in bulk by the lender). This is where 680 lives today. Sagen's guideline for loans at or below 80% LTV states that at least one applicant should have a recommended minimum score of 680. Portfolio-insured lending is a large share of Canadian prime mortgage funding, and the insurer's recommendation propagates into lender policy.

Uninsured mortgages (20% or more down, no insurance). OSFI's Guideline B-20 governs federally regulated lenders here and prescribes no minimum credit score. The floor is whatever each lender's underwriting policy says it is. In practice, internal cut-offs at prime lenders cluster in the high 600s, and 680 is the figure most often cited as the line between prime and alternative treatment. That is industry practice, not regulation, and it varies by institution.

The figure has a history, and the history explains why so much published guidance is out of date.

Before July 2020, CMHC's structure was two-tiered: a 600 floor for eligibility, with a recommended 680 to access the higher 39/44 debt-service ratios. Borrowers between 600 and 679 were held to 35/42. On 1 July 2020, CMHC tightened, raising its minimum to 680 and capping ratios at 35/42 for everyone. On 5 July 2021 it reversed, restoring the 600 floor and moving to 39/44 across the board.

So the same number has been, within six years, a recommendation for better ratios, a hard floor, and then neither. Articles written in each phase are still ranking. If a source says 680 is CMHC's minimum, it is describing a twelve-month window that closed in 2021. If it says 680 unlocks 39/44 at CMHC, it is describing the pre-2020 structure.

What 680 is today: Sagen's recommended minimum on the insurable tier, and a widespread internal prime cut-off. Both real. Neither a CMHC rule.

The intuition most people bring is that a higher score buys a lower rate, continuously, the way a better bid wins an auction. Canadian mortgage pricing does not work that way in the prime space.

Prime rate sheets are built on insurance status (insured, insurable, uninsured), loan-to-value, term, property type and occupancy. Score is a gate to the sheet, not a line on it. A file that clears the insurer's floor at 640 and a file at 810 are, at most lenders, priced off the same grid. The 810 file may get an exception approved more readily or a marginal ratio waved through, but the contract rate comes from the grid.

The step happens when a file falls below the gate. It then leaves prime and lands with an alternative or "B" lender, where pricing is materially higher and a lender fee typically attaches on top of the rate. That is a discontinuity, not a slope. The distance between 679 and 681 can be worth more than the distance between 681 and 850.

There is a second, smaller step above prime: some insurers and lenders extend maximum debt-service ratios or specific programs only above a score line. Crossing it does not change the rate; it changes how much you can qualify for at that rate.

Read against the band structure, the value of a higher score depends entirely on where you start.

Below 600. The insured route is closed until one borrower crosses 600. Every point up to that line has immediate value, because it changes which market you are in.

Between 600 and 679. Insured lending is open. Insurable lending on a Sagen-backed file is below the recommended line. Prime uninsured lending is at the discretion of each lender's policy. Improvement here is about widening the set of lenders and programs that will look at the file, not about rate.

680 and above. The gates are cleared. Further improvement changes little at the rate sheet. It may still change the outcome on a marginal file, because underwriters have discretion on exceptions and a stronger bureau makes exceptions easier to grant.

One borrower is enough. CMHC and Sagen both frame the floor as applying to at least one borrower. On a joint application, a co-borrower with a clean bureau can carry a file the other applicant could not carry alone. The debt-service math still includes everyone's obligations, but the score gate is tested against the strongest file in the application.

The gradient people expect does exist — but below the prime line, not above it.

Alternative lenders price by score band as a matter of course. A file in the low 600s and a file in the mid 500s will be quoted from different tiers, with different rate premiums and different fee structures, and moving between those tiers is worth real money. The same is true of private lending, where the score is one input among several and the property carries more of the weight.

Two consequences. First, the same 40-point improvement that changes nothing on a prime file can change the tier on an alternative one. Second, the most expensive place to sit is just below a prime gate — priced as alternative, with the friction of alternative, for a file that is one bureau update away from prime treatment.

Alternative lending also carries its own term structure. Terms are typically short — one and two years are common — because the product is designed as a bridge back to prime once the bureau recovers. That means the renewal exposure discussed elsewhere on this site arrives sooner and more often for a borrower in this segment, and the exit back to a prime lender is itself a re-qualification against the prime gates.

One thing the score does not touch at all is the minimum qualifying rate.

For insured mortgages and for most uninsured originations at federally regulated lenders, the qualifying rate is the greater of the contract rate plus 2 percentage points or 5.25%. It is applied to the debt-service calculation regardless of the borrower's score. An 800 is tested at the same rate as a 640. The score decides whether the file is looked at; the qualifying rate decides how much the file supports once it is.

The one carve-out is transactional rather than score-based. Since 21 November 2024, OSFI no longer prescribes the qualifying rate on uninsured straight switches at renewal — a move to a new federally regulated lender with no increase to the loan amount or remaining amortization. That exemption is available to a borrower with any score the receiving lender will accept, and it says nothing about the score itself.

So the two gates are independent. A strong bureau can carry a file to a lender that then declines it on debt-service. A marginal bureau can clear an insurer's floor on a file that qualifies comfortably. Reading them as one dial — "my score is high, so I will qualify for more" — conflates a gate with a calculation.

A score is a compression of the report, and underwriters read the report. Several things in it can move a decision even when the score clears the line:

• Recency and severity of derogatory items. A collection or write-off from eighteen months ago reads differently from one that is five years old, and the score alone does not distinguish them well.
• Thin files. A short credit history with two trade lines can produce a respectable score that an insurer or lender treats with caution because it has not been tested. Newcomers to Canada encounter this most often, and insurers publish newcomer programs specifically because the score understates the risk information available.
• Utilization at the time of pull. Revolving balances close to their limits depress the score and also signal cash-flow strain independently.
• Inquiry patterns. A cluster of new credit applications in the months before a mortgage application is read as a signal on its own.

None of these appear on a rate sheet. All of them appear in an underwriter's notes.

Does the lender pull both bureaus? Practice varies. Many pull one; some pull both and use the lower or the average. The FCAC point stands either way: the number the lender works from is theirs, and it may not match what you see.

Does a rate hold protect against a score change? A rate hold locks pricing, not approval. If the bureau changes materially between hold and funding, the file is re-assessed.

What if the score drops between approval and closing? Lenders commonly re-pull before funding. A new derogatory item, a large new debt, or a jump in utilization can reopen an approved file. This is a condition of the commitment, not a discretionary check.

Is there a score above which nothing matters? No. The score gates access; income, debt-service ratios, down payment source, property and the qualifying rate still determine the approval. A high score with ratios over the maximum is a decline.

Does the qualifying rate interact with the score? Not directly. The minimum qualifying rate — the greater of the contract rate plus 2% or 5.25% for insured and most uninsured originations — is applied regardless of score. A stronger score does not lower the rate you are tested at.

The score is tested against a small number of lines: 600 at the insurers, 680 on Sagen's insurable tier and at many prime lenders' internal policies, and whatever each uninsured lender sets for itself. Above the relevant line, the rate comes from the grid, not from the score. Below it, the lender category changes and the cost steps up.

That structure means the question is rarely "how high is my score" and almost always "which side of the line is my score on, and whose line is it."

Specific approval decisions depend on the full application and the policies of the lender and insurer involved. For advice on your own file, talk to an independent licensed mortgage professional. This article is educational information about how thresholds work, not an offer of credit and not a recommendation.