If you’re approaching renewal and have filed (or are considering) a Consumer Proposal or Bankruptcy, you’re not alone in wondering whether your lender will say “yes.” The reassuring answer: many homeowners renew successfully, especially with their current lender, as long as they’ve kept the mortgage in good standing. Renewal with a new lender is usually harder until you’ve rebuilt some credit history—but it’s not impossible with time and the right steps.
Below is a clear, practical guide to how renewals work in Canada, what lenders look for after an insolvency filing, and how to prepare so your renewal goes as smoothly as possible.
Renewal vs. refinance: why the difference matters
Renewal happens at the end of your mortgage term (e.g., after five years). You either sign a new term with your current lender or you switch to another lender for a fresh term on the remaining balance. The principal doesn’t go up unless you borrow more.
Refinancing is different: you’re applying for a new mortgage (often for a higher amount or with a reset amortization). That’s a more rigorous underwriting process with deeper credit and income checks—especially difficult during an active insolvency.
The takeaway: staying with your current lender at renewal is typically the simplest path while you rebuild.
The Government of Canada website outlines how renewals work and encourages borrowers to start preparing months before maturity so they can compare options or negotiate with their current lender.
How an insolvency filing interacts with a mortgage
A mortgage is a secured debt—your home is the collateral—so it’s treated differently than credit cards or lines of credit in a Consumer Proposal or Bankruptcy. In general, secured creditors aren’t affected by an insolvency if you keep the payments up to date. That means if you’re current and there are no other issues (like property tax arrears or major equity concerns in a bankruptcy), you can usually continue with your mortgage. This point is reinforced by the Office of the Superintendent of Bankruptcy in its consumer guidance.
What this means in practice:
- Consumer Proposal: Most lenders focus on whether your mortgage is current. It’s often possible to renew with your existing lender during or after a proposal if your payment history on the mortgage is clean. Switching lenders is tougher until you’ve re-established credit and (often) completed the proposal.
- Bankruptcy: If you’re current on payments, many lenders allow renewal with them even during or shortly after discharge. Switching lenders is typically deferred until you’ve had 12–24 months of steady, positive credit behaviour.
Need a tailored plan? Our Licensed Insolvency Trustee can review your numbers, the status of your filing, and your lender’s requirements so you’re not guessing.
What lenders actually look for at renewal
Whether you filed a consumer proposal or bankruptcy, most lenders zero in on:
- Payment performance on the mortgage. On-time, no NSF/returned payments, and property taxes kept current (especially if you pay them yourself).
- Debt-to-income and stability. Consistent income and a budget that supports the renewed payment.
- Overall credit behaviour. Fewer new inquiries, no fresh collections, and—ideally—two re-established trade lines (e.g., a secured card and a small installment/credit-builder loan) with low utilization.
If you’re in Manitoba, our post on overcoming debt in Winnipeg covers how we structure consumer proposal Winnipeg plans that keep your mortgage current while you re-establish those credit signals.
Renewal with your current lender vs. switching lenders
Staying with your current lender
- Easiest path post-insolvency if your payments are current and your overall profile is stable.
- Underwriting is usually lighter than a new application, though lenders can review your credit and income and may adjust pricing based on risk.
- Start the discussion 4–6 months before maturity so you can address any issues early and negotiate term/rate options.
Switching to a new lender
- Expect a more traditional approval process. Many lenders prefer that a Consumer Proposal be completed and that you show 12–24 months of clean credit with two active trade lines.
- You may be asked for proof of income, property tax statements, and updated appraisals.
- If switching isn’t viable now, renew with your current lender while you keep rebuilding; revisit switching at the next maturity.
For a deeper look at timing, documentation, and what mortgage lenders want to see, our blog on buying a home after bankruptcy or consumer proposal outlines the re-establishment steps that also strengthen your renewal file (even if you’re not purchasing).
Active Consumer Proposal vs. completed Proposal: does it change renewal odds?
Yes. While many homeowners do renew with their current lender during an active proposal (again, when the mortgage is current), lenders generally view a completed proposal more favourably. That’s another reason some clients explore accelerating proposal payments or a lump-sum offer—finishing sooner can improve your profile and shorten how long the proposal appears on your credit report.
If you’re weighing this, we can discuss options during your consultation and structure a debt solutions Winnipeg plan that balances cash flow now with your mortgage goals later.
For how proposals appear on your file (often R7 during repayment) and why new, on-time trade lines still help your score trend upward, see how a consumer proposal affects your credit report.
Practical prep: a 90-day renewal checklist
90–60 days out
- Confirm your maturity date and open a renewal conversation with your lender. Ask what documentation they’ll want (income, insurance, property tax).
- Review your budget against the likely payment at renewal. If cash flow is tight, ask about options to extend the amortization or adjust payment frequency. (These can reduce payments but may increase total interest cost; weigh pros/cons carefully.)
- If you owe CRA and that’s affecting cash flow, explore our tax debt solutions to stabilize things ahead of renewal.
60–30 days out
- Eliminate avoidable red flags: no late payments, no NSF, and keep balances under 30% on revolving credit.
- Documentation tidy-up: recent pay stubs, T4/T1 summaries, property tax confirmation, mortgage statement, and insurance binder.
- If you hope to switch lenders in the future, continue building two clean trade lines and limit hard inquiries.
30 days out
- Compare the offer from your lender against current market options. If switching now isn’t realistic, negotiate term and rate with your lender and renew—then keep rebuilding for your next term.
- Confirm there are no arrears and that property taxes are paid/current (these are common last-minute snags).
What happens if my lender declines renewal?
It’s uncommon when the mortgage is current, but it can happen—especially with more complex income or during very tight credit conditions. If your current lender won’t renew:
- Ask whether a shorter term or adjusted amortization would allow renewal.
- Explore “B-lender” or credit union options as a bridge while you rebuild (expect higher rates/fees).
- Review your budget with a Licensed Insolvency Trustee to see if changes to your consumer proposal or other debt help strategies can free up cash flow.
- If tax arrears are part of the picture, address them proactively so they don’t derail a last-minute approval.
Manitoba/Winnipeg notes we see in practice
- Many clients in Winnipeg renew with their current lender while completing a consumer proposal in Manitoba, and then switch to a new lender at the next maturity after 12–24 months of clean, re-established credit.
- Others use renewal timing to restructure household cash flow—pairing a steady mortgage with a customized debt solutions Winnipeg plan that tackles high-interest unsecured debt outside the mortgage.
FAQs
Can I renew my mortgage during an active Consumer Proposal?
Often yes with your current lender—provided the mortgage is current and your profile is stable. Switching to a new lender typically requires more re-established credit and, in many cases, completion of the proposal.
Will Bankruptcy make me lose my house at renewal?
Bankruptcy does not automatically affect secured creditors like your mortgage lender. If you stay current and meet your lender’s renewal criteria, many homeowners keep their mortgage and renew. Policies vary by lender, so start discussions early.
Do lenders always check my credit at renewal?
They can. Even if your lender’s process feels lighter than a new application, they may still review your credit and income. Preparing documentation and demonstrating clean, recent payment behaviour helps.
The bottom line
A Consumer Proposal or Bankruptcy doesn’t automatically block your mortgage renewal—especially with your current lender. Focus on what you can control: on-time mortgage payments, current property taxes, and a steady record of two small, well-managed trade lines. If switching lenders isn’t feasible yet, renew now and keep rebuilding for your next term.
When you’re ready, we’ll help you align your debt strategy with your mortgage goals—whether that’s a consumer proposal that fits your budget or hands-on guidance from a Licensed Insolvency Trustee.