Mortgage brokers share options for homeowners facing a mortgage non-renewal

A real estate sold sign is shown in Oakville, Ont., on Sunday, Dec. 20, 2020. THE CANADIAN PRESS/Richard Buchan

Getting your mortgage renewed can be stressful for some homeowners, but getting a non-renewal from your lender can take that stress to a whole new level.

As a wave of homeowners who bought at rock-bottom interest rates prepare to renew at higher rates this year, a small number of them will be cut off from their lender.

Leah Zlatkin, licensed mortgage broker and LowestRates.ca expert, said lenders often reach out months ahead of the renewal date.

“If you are somebody who has had trouble making your payments on time … and they see that there's a pattern of missed payments on credit cards or negative balances in chequing accounts or negative balances in savings accounts, they may second-guess that renewal, and they may call you to say they’re not renewing your mortgage,” Zlatkin said.

Non-renewals are mostly underpinned by financial challenges, but another reason for non-renewal could be if the lender views the homeowner as what they call a serious character risk. For example, she said a bank may have reservations about renewing a client whose name is in the news regarding a criminal trial for fraud.

Over the past few years, the Bank of Canada hiked its key lending rate to quell inflationary pressures after the COVID-19 pandemic. Though borrowing costs have come down from their recent peak, the current policy rate sits at 2.25 per cent, about two percentage points higher than where it stood in the early years of the pandemic.

Last week, the Canada Mortgage and Housing Corp. said in a report that it sees signs of financial stress among homeowners in Toronto and Vancouver, with missed mortgage payments projected to steadily increase, albeit from a low level.

The report also said first-time buyers who purchased during the pandemic when interest rates were at historic lows are also showing greater signs of vulnerability. It said those homeowners took on larger debt levels relative to their income and have limited equity in their homes that were purchased at peak prices.

The national housing agency said more than 1.5 million households have already renewed their mortgage at higher interest rates, with another million expected to do so in the coming year.

If a homeowner is facing a non-renewal, experts say they have a few options.

Zlatkin said that if someone has other people they can add onto the mortgage as a guarantor or cosigner, like a spouse, parent or sibling, that could help with obtaining a renewal.

Borrowers could also look to increase their income by renting out part of the home or taking on additional work, she said.

Ron Butler, principal broker at Butler Mortgage, said lenders "don't just randomly non-renew."

“The federal government has made it clear to them that if people are up-to-date in their payments, they should and must provide some sort of renewal accommodation,” he said.

In addition to boosting income, Butler said paring down debt could also help.

“For instance, you have two car loans, maybe you sell one of the cars or retire one of the loans,” he said.

However, some homeowners may have to resort to selling their home or obtaining a private mortgage, which can come with much higher borrowing costs.

For comparison, mortgage rates at a bank could be around four per cent, around five or six per cent at an alternative lender, and roughly nine per cent or higher at a private lender.

He said in situations like this, despite the higher costs, it will give the homeowner some time to improve their financial situation, with the goal of being able to return to a traditional lender.

Zlatkin said there is currently “no indication” that lenders will be pulling back on renewals this year.

“As long as people are making their payments and they've not had any major issues that the bank can identify, and there's nothing on the credit bureau that's going to be a negative, most people are not going to have problems on renewal,” she said.

This report by The Canadian Press was first published Feb. 12, 2026.

Daniel Johnson, The Canadian Press