MCAN Financial Mortgage Review: Lending Guidelines and Who They Suit

MCAN Financial Mortgage Review: Programs & Lending Guidelines

How MCAN Financial'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.

MCAN Financial's Mortgage Offering — Residential

Residential lending runs under the MCAN Home name, on two clearly separated shelves.

Precision Prime — insured. Purchases, transfers and second homes, underwritten to insurer standards. Cottages, newcomers and non-permanent residents on a work permit are all eligible. There is a no-frills high-ratio option at a lower rate for borrowers who accept reduced features. Assumptions and porting are available.

Discover Alternative — uninsured. Purchases and refinances on owner-occupied homes and investment property, with self-employed income read from bank statements, credit scores accepted well below prime standards, and amortization to 35 years. Holding companies are considered.

Second mortgages as a published product. Refinance only, loans from $50,000 to $750,000, to 80% combined value, amortized as long as 35 years, on one- and two-year terms. Most alternative lenders in this directory take first position only.

A student housing program. Financed to 70% of value with a limit on occupants — a property type that is otherwise a near-universal decline in this market.

Also available: bridge financing for short gaps, secondary financing, a one-year fully open alternative mortgage, and a transfer program on the prime side with appraisal costs covered and a discharge fee rebate.

No home equity line of credit on either shelf, and no commercial lending through the alternative program.

MCAN Financial Income and Qualification Requirements

Ratios by program.

Qualifying rate. The contract rate plus two points, or the applicable benchmark where higher.

How income is verified. MCAN uses a two-document model — a primary document showing current income, and a secondary confirming history. Salaried and hourly borrowers provide a pay record, two months of deposits or an employment letter, backed by a year-end pay record, tax slip or assessment. On uninsurable files a verbal employer confirmation can serve as the second source. Casual, secondary-job, contract, overtime, bonus and tip income needs two years of verification.

How income is read. Commission income needs two years of filed totals. Seasonal work needs a two-year history, and Employment Insurance counts only where the work is genuinely seasonal and the benefit has been received for two years. Pension income counts with the usual slips and deposit history. Investment income counts. Maternity and parental leave counts at full return-to-work income where the employer confirms a return within a year. Disability counts, temporary or long-term, with permanency confirmed for the latter.

Support income is accepted only alongside employment income and cannot stand alone. Child benefits count for children up to fourteen, capped at 30% of total income. Foster income counts with two years of experience where the caregiver lives on site. Non-taxable income is grossed up.

Rideshare and delivery income counts where filed. Short-term rental income on the property being financed does not.

Self-employed borrowers on the documented route provide two of the standard tax documents plus a second confirmation the business exists. On the alternative bank statement route, twelve months of business bank statements carry the income, alongside invoices or contracts, a tax status confirmation, business registration and a declared-income letter or financials.

Two income types worth knowing about on the alternative shelf. Contributory income from a household member not on the mortgage counts to a monthly cap, higher in major centres, limited to 30% of the borrower's income. Boarder income counts for up to two boarders at a monthly cap each, where they have lived there six months, again capped at 30% — and the appraisal has to confirm the bedrooms exist. Very few lenders publish a boarder policy at all.

Down payment. Savings, investments, registered funds, gifted equity from family, proceeds of a sale or an inheritance, with 90 days of history on gifted funds. Closing costs at 1.5% are required on the prime side; on the alternative shelf the requirement is simply that enough is provisioned to close.

MCAN Financial's Specialty Programs

Discover Alternative bank statement program. Aimed at self-employed professionals, skilled trades and small business owners, on purchases and refinances, owner-occupied and investment property, to 80% of value and $1.5 million — with more considered individually. Amortization reaches 35 years where the credit score is 600 or better, and 30 years below that. Income comes from twelve months of business deposits rather than tax returns.

Second mortgage program. Refinance only, $50,000 to $750,000, to 80% combined, one- and two-year terms, minimum score 550, confirmable income only. Amortization runs to 35 years with strong credit. Ratios step by credit band from 55/55 down to 48/48 on rentals.

Student housing. To 70% of value with up to four occupants, on condominiums, townhouses and detached homes, with a minimum score of 640 and a capped loan size. Student rentals are excluded outright by most lenders here, so this is a genuine gap-filler.

One-year fully open alternative mortgage. Prepayable at any time with no penalty, minimum score 600, to 80% of value, convertible into any other alternative term during the year. For a borrower expecting to sell or refinance quickly, an open term at an alternative lender is unusual and often cheaper than paying a penalty later.

No-frills insured mortgage (Precision Prime). A lower-rate, reduced-feature high-ratio product for owner-occupied homes and second homes, minimum score 650, amortization capped at 25 years.

Bridge financing. Short and specific — up to $500,000 for a maximum of 30 days, on both shelves.

New to Canada and non-permanent residents. Financed on the insured shelf under insurer rules, with a valid work permit required.

Smart Switch transfer program (prime). Transfers from federally regulated institutions with appraisal costs covered and a rebate toward the outgoing discharge fee, requiring a 650 score and standard ratios.

Minimum Credit Scores & Treatment of Liabilities

Scores.

On the alternative shelf the score sets the loan-to-value rather than the yes or no — 500 supports 75% of value and scores in the high 400s still support 65%. That is among the lowest published floors in this directory.

Credit history. On the prime side, a past insolvency caps lending at 90% of value, must be discharged at least two years, and needs an active trade line of reasonable size seasoned two years — with no rate premium where those conditions are met. Ordinary files need at least twelve months of bureau history and one seasoned active trade line. Multiple bankruptcies, multiple proposals, defaults, serious recent arrears and major derogatory items after a discharge are not acceptable on the prime shelf, which is where the alternative programs pick up.

Liabilities. Heating is a flat monthly figure by square footage, starting at $75 for smaller homes. Support the borrower pays is not deducted from income on the prime side. Half of condominium fees count. Closing costs at 1.5% on the prime side.

Guarantors must go on title where their income is being used — a firmer rule than the several lenders here that keep guarantors off title. A spouse not on title is not required to be on the mortgage.

No lender fees on the prime side. Fees apply on the alternative shelf, the open mortgage and second mortgages.

Terms & Amortization Options

Terms. Standard fixed and variable terms on the prime side. On the alternative shelf, terms are shorter, with a one-year fully open option that converts into any other alternative term during the year. Second mortgages run one to two years.

Amortization.

Prepayment. 20% lump sum and a 20% payment increase on prime and on transfers; 15% and 15% on second mortgages. The one-year open mortgage can be prepaid in full at any time with no penalty.

Penalties. The greater of an interest rate differential or three months' interest.

Porting. Available on the prime side, and must be completed within the same calendar month — a tighter window than the 30 to 120 days most lenders allow, and something to raise with the lawyer before firming up closing dates.

Assumptions are permitted on the prime side.

Bridge financing is capped at 30 days, which is short. A longer gap between a sale and a purchase needs a different solution.

Special Notes

• Credit score sets the loan-to-value on the alternative shelf, not the approval. A score in the high 400s still supports 65% of value, and 500 supports 75%.
• Thirty-five year amortization on the alternative shelf and on second mortgages, with a 600 score.
• A published second mortgage program, refinance only, to 80% combined.
• Student housing is financed to 70% of value — almost universally declined elsewhere.
• Boarder and contributory income are counted, each to a monthly cap and 30% of the borrower's income, with the appraisal confirming the bedrooms.
• A one-year fully open alternative mortgage, convertible mid-term. For a borrower planning an exit inside a year, this avoids a penalty entirely.
• Support income cannot stand alone on the prime side — it counts only alongside employment income.
• A port must complete within the same calendar month, which is the tightest window in this directory.
• Bridge financing maxes at 30 days.
• No home equity line of credit on either shelf.
• Guarantors go on title where their income is used.
• Short-term rental income on the subject property is not counted, though rideshare and delivery income is.
• Condominiums are financed from 450 square feet, which is at the accommodating end. Condominium hotels, and buildings with active litigation or a pending special assessment, are excluded.
• Rural appetite is limited. House plus five acres of lending value on parcels to twenty acres, and no working or hobby farms. Cottages must be four-season.

Service Area

Precision Prime (insured): Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. Quebec is not covered, other than individually where an insurer is willing.

Discover Alternative (uninsured): British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland — a narrower list, dropping Prince Edward Island and New Brunswick.

Neither shelf covers the territories.

Rural lending is limited on both. Lending value covers a house plus five acres, on parcels no larger than twenty acres, and the alternative guidelines note plainly that rural files are harder to place. Working farms and hobby farms are excluded. Cottages must be four-season, and on the alternative shelf well and septic are expected rather than exceptional.

Contributory and boarder income caps vary by market, higher in major centres than elsewhere, which is a useful signal of how the lending map is drawn.

Loan-to-Value Treatment

Credit score is the lever on the alternative shelf. It sets the ceiling directly — 80% at the top of the range, 75% from 500, and 65% in the high 400s — and it also sets amortization, with 35 years available only at 600 and above. A borrower deciding whether to spend six months repairing credit before applying is really deciding between two different mortgages.

Rental income treatment on the alternative shelf is generous: 95% added back where the subject property is owner-occupied with rental units, and 90% offset on other rental properties. All units in a triplex or fourplex must be legal.

On the prime side, insurer rules govern, with a past insolvency capping lending at 90% of value.

Loan sizes. Alternative lending to $1.5 million, with $2 million considered individually. Second mortgages $50,000 to $750,000. Student housing and bridge financing are each capped at $500,000.