Mortgage renewal shouldn’t feel automatic – where your lender sends you an offer, you choose a term, sign, and move on. Your renewal is an opportunity to make sure your mortgage still works for you — and your credit, debt, and home equity can have a bigger impact on your options than you may realize.
That’s especially relevant for homeowners renewing in the GTA right now. According to the Bank of Canada, the final wave of five-year fixed mortgages taken out during the pandemic will renew over the next 12 months. These mortgages represent about 12% of all outstanding mortgages in Canada, and borrowers in this group are expected to see their payments increase by about 15% on average.
If your renewal is approaching, now is the time to look beyond the rate.
Your credit matters if you want options
If you accept a renewal offer from your existing lender, you may not have to requalify in the same way you would for a new mortgage.
But staying with your current lender isn’t always your best option.
If you want to switch lenders, refinance, consolidate debt, or access equity, your overall financial picture becomes important. Depending on the transaction and lender, that can include your credit history and score, income, existing debts, debt-service ratios, and your home’s equity.
That means a credit issue that didn’t seem particularly significant during your mortgage term can suddenly matter when you want to make a change.
Late payments, high credit-card balances, collections, or a drop in your credit score don’t necessarily mean you won’t have mortgage options. They can, however, affect which lenders and mortgage products are available to you and what they cost.
Debt is becoming part of the renewal conversation
This isn’t just a hypothetical concern.
Canadian consumer debt reached a record $2.64 trillion in the second quarter of 2026, according to TransUnion. Canadians carrying non-mortgage debt owed an average of $28,118, up 7.6% from a year earlier. Ontario also recorded the largest year-over-year increase among the provinces in mortgage delinquency measured at the account level.
That doesn’t mean Canadian homeowners are broadly in financial trouble. In fact, according to TransUnion, 99.7% of mortgage holders were making their payments on time in Q2. The numbers show that financial pressure is becoming more concentrated among some borrowers — particularly in higher-cost markets such as Ontario.
CMHC’s 2026 Mortgage Consumer Survey found that 35% of renewers experienced increased financial pressure due to interest rate changes, with their mortgage payments increasing by an average of $375 per month.
For a household already carrying credit-card balances, a line of credit, car payments, or other debt, another few hundred dollars a month can make a meaningful difference.
Home equity matters too — particularly in the GTA
Credit isn’t the only factor that may have changed since you took out your mortgage.
So has the housing market.
According to TRREB, the average GTA selling price was $993,410 in August 2026, down 2.7% from a year earlier, while the MLS® Home Price Index benchmark was down 4.5%.
For most homeowners, a lower property value doesn’t create a problem at renewal. But it is important if you need to refinance and don’t have enough equity.
The Bank of Canada estimates that, at current home prices, approximately 9% of Toronto-area borrowers renewing in 2027 could be unable to refinance at renewal, compared with about 4% nationally.
That’s an important distinction: renewing a mortgage and refinancing a mortgage aren’t the same thing.
If you need to restructure your mortgage, increase the amount borrowed, or consolidate other debts, waiting until your renewal date to find out what you qualify for can leave you with fewer choices.
What if your credit isn’t perfect?
This is where homeowners sometimes make a mistake: they assume a bank decline or lower credit score means there is nothing they can do.
Mortgage lending isn’t one-size-fits-all.
Depending on your circumstances, there may be options through another prime lender, an alternative lender, or, in some situations, a private lender. The appropriate solution depends on much more than a credit score.
For example, Rakhi looks to understand why your credit changed.
Was there a temporary income interruption? Are credit cards carrying unusually high balances? Did you miss payments? Has household debt grown over the last few years? Are you self-employed and showing less income on your tax return? Do you have significant equity in your home?
Those are very different situations and can lead to very different mortgage solutions.
And now there’s more uncertainty around rates
For much of the recent rate-cutting cycle, borrowers were understandably focused on when rates might come down next.
The conversation has changed.
In a September 21 speech, Bank of Canada Governor Tiff Macklem stressed that the Bank does not want to raise its policy rate unnecessarily if inflation pressures are contained. But he also warned against responding too slowly if inflationary pressures become more persistent.
That is not a signal that a rate increase is coming. Base your decisions on your finances today, while still considering what could happen to rates over the term you choose.
Six things to do before your mortgage renews
1. Start early. Don’t wait for your lender’s renewal letter. Starting several months before renewal gives you time to review your situation and address issues, rather than reacting at the last minute.
2. Check your credit report. Look for errors, missed payments, or accounts you’ve forgotten about. If there is a problem, knowing early gives you time to decide what you can realistically improve.
3. Pay attention to credit utilization. Large balances relative to your available credit can affect your credit profile. Avoid taking on unnecessary new debt immediately before applying for mortgage financing.
4. Add up all your monthly debt payments. Don’t look at the mortgage in isolation. Credit cards, lines of credit, vehicle loans, and other obligations all affect your monthly cash flow and may affect qualification.
5. Don’t automatically accept your lender’s first renewal offer. Compare the rate, but also look at prepayment privileges, penalties, portability, and other mortgage features. A slightly lower rate isn’t necessarily the better mortgage.
6. If you’re considering debt consolidation, review it before renewal. Using home equity to replace high-interest debt with lower-cost borrowing can reduce monthly payments. It also converts unsecured debt into debt secured by your home, which can extend repayment over a much longer period. The numbers need to make sense — not just the monthly payment.
A renewal is a chance to reset
If your income, credit, debt, or financial priorities have changed since you arranged your mortgage, your renewal strategy may need to change too.
And if your credit isn’t perfect, don’t assume your only choice is to sign whatever your existing lender sends you.
The earlier we review your credit, debt, equity, and renewal options, the more time we have to determine what makes sense, whether that’s staying with your current lender, switching lenders, restructuring debt, or choosing a mortgage that’s a better fit for the next few years.
