4 Ways Alternative Lending Beats Traditional Bank Financing

Lisa Manwaring • October 9, 2019

Alternative lending refers to lending practices that fall outside the normal banking channels. These are lenders that think outside the box and offer lending solutions to Canadians who wouldn’t otherwise qualify for traditional bank products.

Although we all like to think that we’re going to qualify for the best mortgages available, this isn’t always the case. Sometimes life just gets in the way! So here are four times that alternative lending beats your typical banking practices.

Damaged Credit

Life happens, businesses and marriages break down, health can be taken for granted and then taken away. Regardless of why credit has been damaged, there are alternative lenders that look at the strength of employment and income, and the downpayment or equity to offer a new mortgage.

Although the rates can be a little higher here, if it’s the choice between buying a property or not, having options is always a good thing and that’s what the alternative lenders will do, offer options.

If you do have damaged credit, the goal is to be working towards establishing better credit and moving back into a typical mortgage as soon as possible. Use an alternative lender to bridge that gap!

Self-Employment

If you run your own business, you most likely have considerable write-offs that make sense for tax planning reasons but don’t do so much for your verifiable income. Traditional lenders want to see verifiable income, alternative lenders can be considerably more understanding and offer very competitive products.

As the rates on alternative lending aren’t that far from A lending, alternative lending has become the home for most serious self-employed Canadians. Yes, you might pay a little more in interest rates, but oftentimes that money is saved through corporate structuring.

Non-traditional income

Welcome to the new frontier of earning an income.

If you make money through non-traditional employment like Airbnb, tips, commissions, uber, or uber eats, alternative lending is more likely to be flexible to your needs. Most traditional lenders want to see a minimum of two years of established income before considering income on a mortgage application. Not always so with alternative lenders (depending on the strength of your overall application).

Expanded Debt-Service Ratios

With the government stress test significantly lessening Canadians ability to borrow, it’s a good point to note that there are lenders in the alternative channel that allow expanded debt-service ratios which can help finance more expensive (and suitable) property for responsible individuals.

Typical A channel lenders are restricted to GDS and TDS ratios of 35/42 or 39/44 (depending on credit). However, alternative lenders, depending on the loan-to-value ratio can be considerably more flexible. The more money you have as a downpayment, the more you’re able to borrow and expand those debt-service guidelines.

So there you have it, 4 ways alternative lending beats out traditional bank financing. If you would like to discuss mortgage financing, please don’t hesitate to contact me anytime!

LISA MANWARING

MORTGAGE EXPERT

LET'S TALK

RECENT POSTS

How to Get a Mortgage for a Second Property

By Lisa Manwaring • March 25, 2026
Thinking About Buying a Second Property? Here’s What to Know Buying a second property is an exciting milestone—but it’s also a big financial decision that deserves thoughtful planning. Whether you're dreaming of a vacation retreat, building a rental portfolio, or looking to support a family member with a place to live, there are plenty of reasons to consider a second home. But before you jump in, it's important to understand the strategy and steps involved. Start with “Why” The best place to begin? Clarify your motivation. Ask yourself: Why do I want to buy a second property? What role will it play in my life or finances? How does this fit into my long-term goals? Whether your focus is lifestyle, income, or legacy planning, knowing your “why” will help you make smarter decisions from the start. Talk to a Mortgage Expert Early Once you’ve nailed down your goals, the next step is to sit down with an independent mortgage professional. Why? Because buying a second property isn't quite the same as buying your first. Even if you’ve qualified before, financing a second home has unique considerations—especially when it comes to down payments, debt ratios, and how lenders assess risk. How Much Do You Need for a Down Payment? Here’s where the purpose of the property really matters: Owner-occupied or family use: You may qualify with as little as 5–10% down, depending on the property and lender. Income property: Expect to put down 20–35%, especially for short-term rentals or if it won’t be occupied by you or a family member. Your down payment amount can be one of the biggest hurdles—but with strategic planning, it’s often manageable. Ways to Fund the Down Payment If you don’t have the full amount in cash, you might be able to tap into your current home’s equity to help fund the purchase. Here are a few ways to do that: ✅ Refinance your existing mortgage to access additional funds ✅ Secure a second mortgage behind your current one ✅ Open a HELOC (Home Equity Line of Credit) ✅ Use a reverse mortgage (in certain age-qualified scenarios) ✅ Take out a new mortgage if your current home is mortgage-free These options depend on your income, credit, home value, and overall financial picture—another reason why having a pro in your corner matters. Second Property Strategy: It’s More Than Just Numbers This purchase should be part of a bigger financial plan—one that balances risk and reward. It’s about: Assessing your full financial health Maximizing your existing assets Minimizing your cost of borrowing Aligning your purchase with your long-term goals Ready to Take the Next Step? There’s no one-size-fits-all answer when it comes to buying a second property. That’s why it helps to talk things through with someone who understands both the big picture and the small details. If you’re ready to explore your options and build a plan to make that second property dream a reality, let’s connect. I’d love to help you take the next step with confidence.

Bank of Canada Holds Rate at 2.25% — March 18, 2026

By Lisa Manwaring • March 18, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. For anyone watching the mortgage market — whether you're renewing, purchasing, or simply keeping an eye on borrowing costs — here's a breakdown of what was announced and what it may mean for you.