CAN A BANK DENY A MORTGAGE RENEWAL IN CANADA?

For the first time in many years in the Toronto real estate scene, we are heading towards a buyers’ market. With much economic uncertainty in the air right now – inflation up and interest rates hiked several times over the past few months, many people might be thinking more about their mortgages than they have in a long time. When interest rates were rock bottom, a renewal at the end of term was, for many, a mere formality. However, in today’s market, things are very different.

Market softening, mainly for semis and condos but also to some extent for detached homes, means shrinking equity. This means a weaker position against which the bank can secure their loan to you. As many rely on the equity accumulated in their home to bolster their mortgage renewals, with this cushion decreasing, renewals may not be as much of a shoe-in as they once were.

As Corben Grant wrote in his article of June 9, 2022, “You may not even realize that being denied a mortgage renewal is possible.” READ MORE