B2B Bank Mortgage Review: Rates, Lending Guidelines and Who They Suit

B2B Bank Mortgage Review: Programs & Lending Guidelines

How B2B Bank's lending guidelines read from the broker side — the programs on the shelf, how income is qualified, credit floors, terms and where they lend. Consumer-facing policy only: broker submission mechanics and compensation are out of scope, and guidelines change, so confirm anything you are planning around with the lender or a licensed broker.

B2B Bank's Mortgage Offering — Residential

B2B Bank lends only through mortgage professionals, and runs two separate shelves under one roof.

Prime. Insured mortgages to 95% loan-to-value and conventional mortgages to 80%, on purchases, transfers from another lender, and refinances. Owner-occupied homes, second and vacation homes, and rental properties of one to four units are all eligible. There is a re-advanceable product — a mortgage and one or more lines of credit registered together — for owner-occupied homes only.

Alternative. A second shelf for files that will not price on prime: self-employed income that tax returns understate, low credit scores, a discharged bankruptcy or consumer proposal, past collections or write-offs, property tax or income tax arrears. No insured lending happens here, and no home equity line of credit is offered on this side.

Also available: bridge financing between a sale and a purchase, purchase-plus-improvements and refinance-plus-improvements for renovations, and a rate guarantee of six to twelve months on new construction. Commercial mortgages are not offered through this channel.

B2B Bank Income and Qualification Requirements

Ratios by program. Insured and prime conventional files qualify at 39% GDS and 44% TDS. On the alternative shelf, those limits open up: to 55/55 for stronger credit on the conforming tier, and to 55/55 on owner-occupied non-conforming files. Second and vacation homes on the alternative side sit at 39/44 with a higher score, and tighten to 35/42 below it. Rental properties qualify at 39/44.

Qualifying rate. The greater of the benchmark 5.25% or the contract rate plus two points, applied the same way to lines of credit.

How income is read. Salaried, hourly, contract, part-time, bonus, casual and overtime income are all usable, generally on a two-year average where the trend is flat or rising, and on the most recent lower figure where it is falling. Commission income needs roughly two years of consistent earnings. Seasonal work is eligible, and Employment Insurance can be counted alongside it with a two-year receipt history. Maternity and parental leave can qualify on full salary where a return to work is confirmed within twelve months.

Self-employed borrowers who can document income need about two years of business ownership, two years of returns and assessments, and — if incorporated — corporate financial statements. Where returns do not reflect what the business actually earns, a stated-income route runs to 90% loan-to-value on the insured side, and a documented route to 65% on the alternative side.

Pension and retirement income is accepted across programs. Child and spousal support can count where it will continue at least five years and stays within roughly 30% of total income; support the borrower pays is treated as a debt. Child benefit payments count on the same 30% test and stop at older children. Foster income is accepted with a two-year record, capped at half of total income. Non-taxable income can be grossed up. Disability income is accepted with limits, though provincial disability support is not. Rideshare and delivery income needs a two-year average; short-term rental income is not counted.

Documents, generally. Proof of employment and recent pay for salaried applicants; two years of tax filings for self-employed applicants; three months of history on down payment funds; a signed gift letter and proof of the transfer where funds are gifted; leases and tax bills where rentals are involved.

B2B Bank's Specialty Programs

Equity Program. For owner-occupied one-to-four-unit homes where income is stable but the strength of the file is the equity. Two tiers: one to 50% loan-to-value with a credit score of 680 or better and total debt service to 65%, and one to 65% with a score of 720 or better and debt service to 60%. Amortization runs to 30 years. Gifted down payments, a bankruptcy history or arrears rule the file out, and a full appraisal is required.

Net Worth Program. For borrowers whose liquid assets carry the file rather than their income. Owner-occupied homes of one to four units plus second and vacation homes, to 65% loan-to-value, minimum score 650, total debt service to 70%, amortization to 30 years, and at least $150,000 in qualifying liquid assets. Investment and registered accounts, savings and guaranteed investments count, with registered retirement income funds discounted. Locked-in accounts, foreign assets, cryptocurrency, business assets, private company shares and equity in a property that has not sold do not count.

New to Canada. Available to people who arrived within the last five years, buying an owner-occupied home of one or two units with as little as 5% down, the first 5% from their own resources. Three months of full-time Canadian employment and a valid work permit or permanent residency are needed, and debts held outside Canada are counted in the ratios. Where there is no Canadian credit file, an international bureau or two alternative references — rent plus utilities or insurance — can stand in.

Alternative Conforming and Non-Conforming. The two tiers of the alternative shelf, separated mainly by credit score and by how far the ratios stretch.

Re-advanceable home equity line of credit. Owner-occupied one-to-four-unit principal residences only, to 80% loan-to-value in combination with a mortgage, or 65% for the line on its own. Supports several mortgage terms and several lines under one registration. Not available on rentals, vacation homes or the alternative shelf.

New construction rate guarantee. Insured, owner-occupied single-family homes, on a five- or ten-year term, holding a rate for six to twelve months.

Minimum Credit Scores & Treatment of Liabilities

Scores. Prime insured and conventional lending starts at 600, and the same floor applies to second homes and vacation properties. The re-advanceable line of credit wants better than 660. On the alternative shelf, the conforming tier starts at 540 and the non-conforming tier at 500. The equity and net worth programs run the other way, requiring 650 to 720 depending on the tier.

Credit history. A bankruptcy, consumer proposal, orderly payment of debts or credit counselling is considered rather than automatically declined, but on the prime shelf there can only be one such event, it must be explained by something like a business failure or a marital breakdown, and the borrower needs a clean twelve months and re-established credit since. A bankruptcy must be discharged at least two years, and lighter proceedings at least six months. The alternative shelf takes a broader view and looks first at ability to pay. Only Equifax is used.

Liabilities. Credit cards and unsecured lines of credit are counted at 3% of the balance. Secured lines and home equity lines are counted as though the balance were amortized over 25 years. Student loans are counted at 1.5% of the balance or the bureau payment. Condominium fees count at half. Instalment and car loans with fewer than six payments left are excluded, as are business loans genuinely paid through the business. Support payments the borrower makes are added as a liability. Heating is calculated from square footage with a floor of $100 a month, and a borrower buying a rental while living with family carries an $800 shelter cost. Closing costs are shown at 1.5% and can be spread over twelve months.

Terms & Amortization Options

Terms. Insured mortgages: one to five years fixed. Conventional: one to five and seven years fixed. Variable: three and five years. The alternative shelf offers one to five years fixed and three- and five-year variable. Fixed terms on the line-of-credit product run one to five, seven and ten years.

Amortization. Insured mortgages amortize to 25 years, extending to 30 for first-time buyers and newly built homes. Conventional and alternative mortgages amortize to 30 years. Rentals and mobile homes are capped at 25.

Payments. Monthly, weekly, biweekly, and accelerated weekly or biweekly.

Prepayment. Increase the regular payment by up to 15%, and pay up to 15% of the original principal once a year; double-up payments are available on fixed terms. Penalties follow the same shape as the large banks — three months' interest or an interest rate differential measured to the posted rate. Blending, extending, increasing or porting is available without an additional charge. Mortgages are portable and assumable subject to requalification, and a port allows the balance to go up or down, with closing dates within 60 days of each other.

Rate holds. 120 days on a purchase and 60 days on a refinance. Formal pre-approvals are not issued.

Special Notes

• Two shelves, one application. The prime and alternative sides have separate rules on almost everything — ratios, scores, amortization, whether a line of credit exists, whether tax arrears can be paid out. A file that does not fit one may fit the other.
• Equifax only. TransUnion reports are not used, so a borrower whose two bureaus differ is read on the Equifax file.
• Tax arrears cut both ways. Personal income tax arrears cannot be paid out of a prime refinance; on the alternative side, both income tax and property tax arrears can be.
• Property taxes. On insured mortgages the bank pays the taxes with no exceptions; on conventional files the homeowner pays the municipality directly. On the alternative shelf the bank administers taxes above 65% loan-to-value.
• A sliding scale caps large loans. Above a threshold that varies by market, only half of the additional value is lent against, which matters on expensive properties and on high-rise condominiums in particular.
• Guarantors must be a spouse or common-law partner, must qualify on their own income, and are not put on title.
• No formal pre-approvals, and a firm offer to purchase is where the process starts.
• Property standards are strict. Short-term rental properties, rooming houses, flips, life-lease and co-operative housing, condominium hotels and fractional ownership, leased land, and mixed-use buildings more than a fifth commercial are all outside policy. Homes on well and septic are exceptions rather than the rule, and hobby farms are not financed. Minimum sizes apply: 700 square feet for a house with a basement, 1,000 without, and 500 for a condominium.

Service Area

Canada-wide through the broker channel, but concentrated by population rather than by province. Within 100 kilometres of the Greater Toronto and Greater Vancouver areas; within 50 kilometres of any centre of 100,000 people or more; and elsewhere in communities of at least 3,000 people. The same footprint governs both the prime and alternative shelves and applies to rental lending as well. Rural properties are limited to a house plus five acres of lending value, on parcels no larger than 20 acres.

Loan-to-Value Treatment

Two things move these numbers in practice. The sliding scale reduces lending above a market-specific threshold, so the effective ratio on an expensive home is lower than the headline. And loan-to-value drives cost on the alternative shelf — a lower ratio prices better and opens the more flexible ratio tiers.