If you got a letter saying your mortgage renewal was denied, do not panic. It feels scary, but you still have options. A bank can refuse to renew your mortgage, but that does not mean you must leave your home right away. You have time to fix the problem. In this guide, you will learn why this happens and what to do next.

What Does Mortgage Renewal Denied Mean?

A mortgage does not last forever. In Canada, most mortgages last 1 to 5 years. When that time ends, you must renew it.

If your bank says no, that is called mortgage renewal denied. It means the lender does not want to give you a new term under the same loan.

Banks like Royal Bank of Canada or TD Canada Trust check your money situation again. They look at your job, income, debts, and credit score. If something changes, they may say no.

But remember: this does NOT mean you lose your home immediately.

Why Was Your Mortgage Renewal Denied?

Banks say no when they think there is too much risk. Risk means they worry you may not be able to pay in the future.

Here are the most common reasons:

• Your credit score went down
• You missed payments
• You have too much debt
• You lost your job or income dropped
• You failed the stress test
• Your home value went down

Your credit score from Equifax or TransUnion is very important. Even a small drop can cause problems.

Low Credit Score

If your score falls below 600, banks may worry. Late credit card payments or unpaid bills can lower your score fast. Even one missed payment can hurt.

Banks use your credit score to decide if you are safe to lend money to.

Too Much Debt

If most of your income goes toward paying loans, the bank may think you cannot handle more payments. Buying a car or taking a personal loan before renewal can hurt your chances.

Banks want to see that you have enough money left each month.

What Should You Do Now?

If your mortgage renewal denied notice arrives, stay calm. You usually have 30 to 120 days before your term ends. That gives you time to act.

The most important thing is to keep making your payments. Do not stop paying.

Talk to Your Bank

Call your lender and ask why they denied your renewal. Sometimes it is because they need more documents. Maybe you need to show new pay stubs or a job letter.

Clear answers help you fix the real problem.

Check Your Credit Report

Mistakes happen. Look at your credit report carefully. You may find:

• A payment marked late that was on time
• An old debt that should be removed
• A balance that is wrong

Fixing mistakes can raise your score quickly.

Look at Other Lenders

One bank saying no does not mean all banks will say no.

For example, if Scotiabank refuses, another lender like Bank of Montreal may accept you.

Some lenders are stricter than others. Credit unions and private lenders may be more flexible.

Can You Switch Lenders?

Yes, you can switch lenders before your mortgage ends. Many homeowners do this.

Switching means a new lender pays off your old mortgage. Then you start paying the new lender.

There may be small fees, like legal or appraisal costs. But switching can save your home if your current bank says no.

What About Private Lenders?

Private lenders are not big banks. They care more about your home value than your credit score.

They are easier to qualify for, but they charge higher interest rates. Many people use private lenders for one year while they fix their credit. Later, they moved back to a big bank.

This can be a short-term solution.

Will You Lose Your Home?

No, not right away.

Foreclosure only happens if:

• You stop making payments
• You cannot find another lender

As long as you keep paying and look for solutions, you are protecting your home.

In Canada, there is a legal process before a lender can take your property. That process takes time.

How to Avoid This Problem Next Time

The best way to avoid mortgage renewal denied problems is to prepare early. Start planning at least six months before renewal.

Here is what you should do:

• Pay all bills on time
  Keep credit card balances low
• Do not take new loans
• Keep your job steady
• Save emergency money

Small changes can make a big difference.

Final Thoughts

Getting a mortgage renewal denied notice feels stressful, but you still have control. You can talk to your lender, fix your credit, switch lenders, or even use a private lender for a short time.

The key is simple: act early and stay calm. When you take action quickly, you protect your home and your future.

 Want to find out the real cause of mortgage denial ? Contact Bank street Mortgage to make your home buying process simple and smooth.

• Call: 613-523-4949
• Email: office@ottawabrokers.com
• Visit: 74 Colonnade Rd, Unit 2, Ottawa, ON K2E 7L2