If your mortgage lender won’t renew your loan, don’t panic. In Canada, mortgage renewal isn’t always automatic—especially if your financial situation has changed. A non-renewal can happen due to credit score issues, missed payments, unstable income, or risk reassessment. But there are still options. You can refinance through another bank, a B lender, or a private lender who focuses on equity and your plans. Acting fast is essential: review your renewal notice, find out the total amount to payout the mortgage, and connect with a mortgage professional right away to avoid default or power of sale.
Why Mortgage Lenders Refuse to Renew Loans
Mortgage renewals are not guaranteed, even if you’ve been with the same lender for years. Lenders reassess risk at the time of renewal, and several factors may trigger a non-renewal decision.
Common Reasons for Non-Renewal:
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Missed or late payments during your mortgage term
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Credit score drops, especially under 600 (not many lenders check credit at renewal)
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Employment or income changes, like job loss or unstable self-employment, leading to mortgage arrears
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Higher debt-to-income ratio from other loans or credit cards, which affects the serviceability of your loan
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Property condition issues, particularly if neglected
Key Takeaway:
Your lender can choose to re-evaluate you at renewal. Even if your payments were on time, they might see your overall risk profile as no longer fitting their criteria.
What Happens When Your Mortgage Reaches Maturity and Isn’t Renewed
A mortgage reaches maturity on its final day of the term. If your mortgage lender won’t renew, you must pay out the balance in full.
What Does “Maturity Date” Mean?
Your mortgage’s maturity date is the last day of your contract term. On that day, the full outstanding principal becomes due unless you’ve arranged a renewal.
Consequences of Non-Renewal:
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You’ll receive a non-renewal notice or written denial from your lender.
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You’ll need to pay out the loan by the maturity date.
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If unpaid, the lender can begin power of sale or foreclosure proceedings.
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A renewal refusal does not remove your obligation to repay the mortgage loan.
Important to Note:
Even if your lender denies renewal, they will typically provide a short grace period. However, this is limited. Don’t rely on it—start preparing immediately.
Immediate Steps to Take if Your Mortgage Lender Won’t Renew
The worst thing you can do is ignore a renewal denial. Time is limited, and quick action protects your home and credit.
Step-by-Step Action Plan:
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Request Written Confirmation
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Get a formal denial and payout balance in writing.
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Verify the Mortgage Maturity Date
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This is your countdown to securing new financing.
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Contact a Mortgage Professional Immediately
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A mortgage broker can access A or B lenders and private lenders who offer alternative mortgage solutions.
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Gather Financial Documents
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Recent mortgage statement
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Property tax bill
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Government-issued ID
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Proof of income (or equity if no income)
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Appraisal or property value estimate
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Explore Short-Term Options
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Consider bridge loans or second mortgages if you’re waiting on income or trying to sell.
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Negotiate for Time (if needed)
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Some lenders may grant a short extension, especially if you’re actively refinancing.
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Mortgage Renewal Alternatives in Canada
Just because your mortgage lender won’t renew doesn’t mean you’ve run out of options. There are other paths—some designed exactly for cases like this.
Option 1: Switch to Another Bank
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If your credit and income are still strong, apply with a different bank.
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Watch for prepayment penalties if you’re switching early.
Option 2: Apply with a B Lender
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B lenders specialize in helping borrowers who don’t qualify with traditional banks.
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Accept stated income, self-employed income, and bruised credit.
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Interest rates are higher, but approvals are more flexible.
Option 3: Use a Private Lender
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Focused on equity, not income or credit.
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Ideal for homeowners with poor credit or no proof of income.
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Short-term solution, often 1–2 years with interest-only payments.
Option 4: Home Equity Loan or Second Mortgage
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Tap into your home’s value without refinancing your first mortgage.
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Can be used to pay off the existing loan and stay in the home.
Option 5: Sell the Property
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If refinancing is not possible, selling might avoid further financial damage.
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You may still walk away with equity in hand.
Comparison Table:
| Lender Type | Who It’s For | Approval Time | Typical Rates |
|---|---|---|---|
| Bank | Strong credit, stable income | 5-10 days | 5%–7% |
| B Lender | Moderate credit, some flexibility | 2–5 days | 7%–9% |
| Private Lender | Equity-rich, bad credit, low docs | 1–2 days | 10%–15%+ |
How to Prepare for Future Mortgage Renewals
Being proactive is your best protection against non-renewals.
Best Practices:
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Check your credit score regularly (Equifax, TransUnion)
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Avoid missed or late payments across all credit products
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Maintain steady income, especially if self-employed
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Start shopping for renewal 90–120 days before your term ends
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Work with a mortgage professional who can monitor your file
Common Mistake:
Waiting until the last 30 days to explore options can put you at the mercy of a single lender or no options at all.
Common Myths About Non-Renewals
There’s a lot of misinformation about what happens when your mortgage lender won’t renew.
Myth 1: “You’re going to lose your home immediately.”
Truth: You still have time. Many lenders will give 30–60 days post-maturity to arrange new financing. But acting fast is essential and communicating with all parties is important.
Myth 2: “No one else will approve me.”
Truth: Private and B lenders exist specifically for this reason. They look beyond your credit and focus on your equity.
Myth 3: “Private lenders are shady.”
Truth: Many are licensed, regulated, and work closely with mortgage brokers. While they charge higher rates, they provide valuable short-term solutions.
Key Takeaways
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A mortgage lender won’t renew for many reasons, including poor credit or missed payments.
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Your mortgage maturity date is the deadline to act.
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You have options: B lenders, private lenders, second mortgages, and even selling.
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Work with a mortgage broker to find alternative financing fast.
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Be proactive for future renewals—monitor credit, avoid late payments, and explore renewal terms early.
FAQ
Q: What are the signs your mortgage lender won’t renew your loan?
A: Signs may include poor communication from the lender, a renewal denial notice, or a request for updated financials that you can’t provide.
Q: Can I still get a mortgage renewal if I have bad credit?
A: Yes, through a B lender or private lender who focuses more on your equity and property value than on credit score alone.
Q: Will my lender automatically renew my mortgage?
A: No. Some lenders offer automatic renewals, but most require a requalification, especially if your credit or income has changed.
Q: How soon should I start renewal discussions?
A: Begin 120 days before your mortgage term ends. The earlier you start, the more choices you’ll have.
Q: What happens if I do nothing by the maturity date?
A: If you don’t refinance or pay the loan in full, your lender can begin legal steps toward selling the property to recover their funds.
You’re Not Alone—Help Is Available When Your Mortgage Isn’t Renewed
Receiving notice that your mortgage lender won’t renew your loan can feel overwhelming—but you’re not alone. Mortgages are complex, and life’s financial challenges don’t always fit neatly into a bank’s approval box.
The most important thing you can do right now is talk to a mortgage professional who understands. Share your story—what’s changed, what’s gone wrong, and how you’re trying to move forward. Perhaps you’ve faced job loss, divorce, illness, or credit difficulties. These aren’t uncommon, and there are lenders who specialize in helping people through exactly these types of situations.
You don’t need perfect credit or a perfect life—you just need a plan.
Mortgage Lender Won’t Renew? Let’s Talk
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