Can you be denied a mortgage renewal? The answer is yes. Although you can be denied a mortgage renewal as your lender reserves the right to do so, it’s an unlikely move on their part. However, there is still a chance you will find your request refused. But you don’t need to worry as our experts are here to guide you through alternative measures.

What Happens If Your Mortgage Renewal Is Denied?

Understand that on the off-chance your broker denies your mortgage, there are other steps to take and there is no need to panic. 

Common Reasons for Having a Denied Mortgage Renewal 

Failure to Make Mortgage Payments on Time 

If you have missed payments on your mortgage with your current lender, you are making yourself out to be an unreliable lendee. Due to this, your renewal may be turned down by the mortgage broker when the time comes. In cases like these, you will want to find a new lender. Missed mortgage payments are the bane of a successful renewal.

Bad or Low Credit 

When you reapply for a mortgage renewal, your mortgage broker could assess your documentation including your trust score [1]. If you have a low or bad score, this paints you in a bad light in the eyes of your lender. A few factors that could affect your trust score include missed payments, many outstanding loans, or even bankruptcy. 

coins and house

High Debt 

If you have accrued a significant amount of debt, you would also be more likely to default on your mortgage payments and the current lender or even a new lender might see you as a high risk. 

Insufficient Down Payment 

Without matching the necessary down payment for a house, your renewal can be refused by a new lender and it can also get denied by your current mortgage broker. This is because without a sufficient down payment you won’t find the best mortgage renewal rates and interest rates.

New Job 

When you switch occupations or if you lost your job, your mortgage renewal  could also be refused by your financial institution. Mortgage brokers view a switch in your financial status as a risky situation. This is mostly true if you get a new vocation that offers a lower income or if you file for bankruptcy.

man working in an office

What You Can Do After Being Denied a Mortgage Renewal

Can you be refused a mortgage renewal from your current lender but negotiate an agreement with a new lender? Yes, you can! That is one of the measures you can attempt if your current lender denies your mortgage renewal this time around. 

Settle on an Agreement with Current Lender 

It might not be the end of the road for you and your current lender if your request was rejected the first time. It’s possible for you to lay out a plan or negotiate a plan of action with the current lender. Once agreement terms are reached, you might get a new contract. If not, you would want to find a new lender.

Talk to a Bad Credit Lender for Mortgage Renewal 

If an agreement is turned down, you may need to talk to bad credit institutional lenders. These institutions don’t base their assessment on your trust score but your overall financial situation. The lenders that you deal with from these companies specialize in bad trust score mortgage payment exclusively, which makes them a good option if your current lender denies your request.

These institutions and other trust companies are often referred to as B lenders. A lenders are mortgage renewal institutions such as banks and credit unions with a stellar reputation. 

Mortgage Renewal

Shop Around for a Private Lender 

If you happen to get denied by a new B lender and your current mortgage lender, you can opt to switch lenders again and consider a private one. This is not the ideal choice as they do not offer a better mortgage rate. In fact, these mortgage brokers have some of the highest rates in the market and end up costing you a lot more over time. However, it’s easier to get approved by private lenders.

Consider a Cosigner for Mortgage Renewal

Another route you can take is to have a cosigner for your renewal. The consignor is typically viewed as a guarantor, and you should be sure they have a high trust rating. This way, it’s more difficult to get turned down and there won’t be a need to submit a ton of additional documents.

Sell Your Home

Possibly the most drastic measure is to sell off your home. You should consider your mortgage term and renewal date before you contact an agent. The renewal date could be far too close for you to close the sale beforehand. In this case, the lender might still have a hold over your home. 

mini house and key

You can opt for a short term contract from a private or B lender if your current one refuses. However, you may find that the lender may demand a higher rate and this could be extra tough on you if you lost your job.


Can you be denied mortgage renewal? 

Yes, you can be denied a mortgage renewal from your financial institution if you fail to make the payments. They can deny your mortgage renewal based on your trust core and financial circumstances.

When you renew your mortgage do they do a credit check?

Yes, they will do a credit score check before they renew your mortgage. Unless your trust score is made available to your broker at all times, they will do a basic check with your application. However, many find this to be a breach of privacy. It’s important to make sure your score is high so there is no reason to deny you.

Does mortgage stress test apply to renewals?

Yes, the mortgage stress test applies to renewals. They are used if you decide to opt for a different lender. The test allows lenders to be sure you can pay the rates despite a rising interest rate or a change in your financial situation. 

What does it mean when your mortgage is up for renewal? 

When your mortgage is up for renewal it means the current term is ending and you need to sign on for a new term. This needs to be done a few months before the end of the agreed period or the lender might refuse your request.

What is the difference between renewing and refinancing a mortgage?

The difference between renewing and refinancing a mortgage is the former involves just renewing the current agreement while the latter opens doors for renegotiating. Refinancing will allow the lendee to negotiate for better terms such as a different amortization period or mortgage rates.


Can you be denied a mortgage renewal? Sadly, the answer is yes. If you have not kept up with the regular payments or if your trust rating has taken a dip, you could be refused a mortgage renewal. If you get turned down, you can still find other ways to get other mortgage lenders that can get you the best interest rate. Just be sure you adhere to the mortgage agreement this time around. 

Foster Mendez

Leave a Reply

Your email address will not be published. Required fields are marked *

four × three =