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Renewing your mortgage should be simple, right? You’ve been making payments, your term is coming to an end, and you’re expecting your lender to send you new paperwork to sign.

And in most cases, that’s exactly what happens.

But once in a while, a borrower gets a surprise: their mortgage renewal is denied.

This can feel scary, especially if you weren’t expecting it. But don’t panic—being denied a renewal isn’t the end of the road. You still have options, and you’re not alone.

In this article, we’ll explain why a lender might deny your renewal, what you can do next, and how to protect yourself in the future.

What Is a Mortgage Renewal?

In Canada, most people don’t pay off their mortgage in one shot. Instead, they sign a contract for a term, usually between 1 and 5 years. At the end of that term, the balance remaining on your mortgage needs to be renewed for another term.

This is called a mortgage renewal. You don’t need a full new mortgage. You’re just picking a new rate, a new term, and sometimes new features (like prepayment options). The rest of your mortgage—your payment schedule and amortization—continues as planned.

Most of the time, if your payments have been on time, your lender sends you a renewal letter with an offer. All you need to do is sign and return it.

Can a Lender Refuse to Renew Your Mortgage?

Yes. While it’s not common, a lender can choose not to renew your mortgage. And when they do, it’s usually for one of the following reasons:

1. Missed or Late Mortgage Payments

This is the number one reason why lenders deny renewal. If you’ve missed several payments, paid late consistently, or gone into default during your term, your lender may decide not to continue the relationship.

Mortgage contracts are based on trust. If a lender sees a pattern of missed payments, they may not want to take the risk of another term with you.

2. Internal Risk Review

Major banks and lenders in Canada do internal reviews of their mortgage portfolios. This means they regularly look at the overall risk of certain mortgages they hold. If your mortgage falls into a category they now see as too risky, they may choose not to renew—even if your payments have been on time.

Here are some examples of what might trigger this:

You originally qualified with low credit, and your credit hasn’t improved

You’re in a high loan-to-value (LTV) situation, especially if the local market has dropped

Your property is in an area where values have declined significantly

Your file no longer fits the bank’s current risk appetite or lending strategy

This process is sometimes called “mortgage de-selection”—a term used when a lender actively chooses not to renew specific types of mortgages based on risk, not payment history.

This isn’t personal. It’s part of how lenders manage their portfolios. But it still leaves you needing to act quickly.

3. Unauthorized Property Changes or Misuse

If you’ve made major changes to the property—like turning it into a rental or subdividing it—without telling the lender, they may see this as a breach of your original agreement.

Even things like leaving the home vacant, making large renovations without approval, or using the home for business purposes can raise flags and cause the lender to reconsider renewing.

4. Other Legal or Title Issues

If there are legal disputes over your property, zoning violations, or title problems (for example, if someone else is suddenly listed on the title), the lender may delay or deny renewal until the issue is resolved. These situations are rare but can cause unexpected delays or denials at renewal time.

Do Banks Check Credit or Income at Renewal?

Usually not—if you're staying with your current lender.

Most major banks in Canada do not require a full requalification when you're simply renewing an existing mortgage.

That means they typically don’t ask for:

Updated income documents

A new credit check

A full debt-to-income review

But there are exceptions.

If your mortgage was originally approved under special circumstances—for example, if your credit was borderline, or you were approved through an exception—your lender may do a deeper review at renewal time. Also, if you've made changes to your mortgage (like increasing the amount or refinancing), a requalification may be needed.

And if you're trying to switch lenders—to get a better rate, for example—you will be treated like a new applicant. That means full requalification with a credit check, income verification, and debt review.

What Happens If Your Renewal Is Denied?

If your lender won’t renew your mortgage, it means you need to find a new lender to pay off the balance of your mortgage before your current term ends.

This process is called refinancing. You’ll need to:

Apply with a new lender

Submit updated documents (income, property value, credit, etc.)

Get approved before your renewal date

Close the new mortgage and use it to pay off the old one

If you don’t secure a new mortgage in time, your lender could begin legal proceedings, such as power of sale or foreclosure.

This is why time matters. If you get a renewal denial—or suspect one might be coming—start exploring options right away.

What to Do If Your Renewal Is Denied?

If your lender won’t renew your mortgage, it’s stressful—but not hopeless. The key is to act quickly and take the right steps to protect your home and secure new financing.

Step 1: Don’t Panic—but Don’t Wait

The worst thing you can do is ignore the situation.

As soon as you find out your renewal was denied—or even if your lender hasn’t sent a renewal offer and your term is ending soon—act immediately. Most lenders give you 30 to 60 days before the end of your term, but that time can disappear quickly when you need to requalify elsewhere.

Even if you’re not 100% sure, it’s better to start exploring options now than to scramble later.

Step 2: Talk to a Mortgage Broker

This should be your first call.

Mortgage brokers work with a wide range of lenders—major banks, alternative lenders (also called “B lenders”), and private lenders. If your current lender won’t renew, a broker can often find another lender that will.

They’ll review your situation, help you understand why the renewal was denied, and recommend the best next step. They can also quickly start preparing your application to avoid delays.

Why a broker is helpful:

They know which lenders are open to borrowers with poor credit, high debt, or unusual income

They can structure your application in a way that gives you the best chance of approval

They can move quickly and shop multiple options at once

They’re familiar with time-sensitive cases like yours

Step 3: Gather Your Documents

The new lender will likely need updated documents, just like when you first got a mortgage. Prepare the following as soon as possible:

Government-issued ID

Recent pay stubs or proof of income (or tax returns if you’re self-employed)

Mortgage statement from your current lender

Property tax bill

Notice of Assessment (NOA) from CRA

Bank statements

Credit report (your broker can pull this)

In some cases, a new appraisal may be required to confirm your home’s current value—especially if you're switching lenders or applying with a private lender.

Step 4: Get a New Mortgage Before Your Term Ends

Your current mortgage balance will need to be paid off by the end of your term. Once your new mortgage is approved, the new lender will:

Send mortgage instructions to your lawyer

Fund the loan and pay off your existing lender

Begin a new mortgage term with new payments

If this process isn’t completed in time, your current lender may begin enforcement actions—such as charging default interest, sending warning letters, or even starting power of sale procedures. That’s why speed and preparation matter.

Step 5: Plan Ahead for the Future

Once you’ve secured a new mortgage, it’s important to take steps so this doesn’t happen again. Here’s how:

Make all payments on time

Pay off credit card debt balances

Avoid taking on new debt before your next renewal

Monitor your credit score regularly

Work with your broker proactively at least 6 months before your next renewal date

If you’re with a B lender or private lender now, your goal should be to move back to a bank lender at your next renewal. That means using this next term to clean up your credit, pay down debt, and strengthen your income documentation.

If Your Mortgage Renewal Is Denied in Canada

Being denied a mortgage renewal can feel like a major setback, but it doesn’t mean you’re out of options. In fact, many homeowners find better solutions through mortgage brokers—solutions they didn’t even know existed.

The most important thing is to act fast, stay calm, and get expert help. With the right guidance, you can avoid default, secure a new lender, and set yourself up for a better financial future.