Financing · Mortgage declined · 2026
A refusal is not a verdict, it is a poorly explained diagnosis. Here are the seven causes behind almost every refusal, and the matching solution for each, from cheapest to most expensive.
A mortgage refusal almost always comes from one of seven causes: debt ratios (GDS above 39% or TDS above 44% of gross income, computed at the contract rate plus 2%, minimum 5.25%); a credit score below the lender's threshold (often 600 to 680 depending on the down payment, any recent bankruptcy or proposal); income the lender cannot verify (probation, self-employed without notices of assessment, cash income); a down payment not documented over 90 days or borrowed where not allowed; an appraisal of the property below the price paid; a property the lender refuses (undivided co-ownership, pyrite, vermiculite, former grow-op, flood zone, leased land); or an offer without a financing condition signed before pre-approval. The solutions, in order: ask for the written reason, reduce debts or payments, increase the down payment or lower the price, add a co-borrower or a guarantor, lengthen the amortization, go through a broker to an alternative lender (higher rate, 1% to 2% in fees) for one or two years, then return to a bank lender.
| Cause | What the lender saw | Solution |
|---|---|---|
| Debt ratios | GDS above 39% or TDS above 44% at the stress rate (contract + 2%, min. 5.25%) | Repay or consolidate a debt, close an unused credit line, lengthen the amortization (30 years if first-time buyer or new build), lower the price, add a co-borrower |
| Credit score | Below 600 to 680 depending on the lender and down payment; recent late payments; proposal or bankruptcy not discharged for 2 years | Correct errors on the Equifax/TransUnion file, settle arrears, wait 6 to 12 months, or alternative lender with 20% down |
| Unverifiable income | Probation, temporary contract, self-employed without 2 years of notices of assessment, undeclared income, non-recurring bonuses | Wait for probation to end, provide 2 years of income, stated-income program with 10% to 35% down, salaried co-borrower |
| Down payment | No 90 days of statements, unexplained deposits, money borrowed at a lender that forbids it, no reserve for closing costs (1.5%) | Document every deposit, gift letter, wait 90 days, add closing costs to the plan |
| Appraisal | Value estimated by the lender's appraiser below the accepted price | Cover the gap in cash, renegotiate the price with the seller (the financing condition allows it), contest the appraisal with comparables, another lender |
| Property | Undivided co-ownership, building with pyrite, vermiculite, buried tank, former cannabis grow-op, flood zone, commercial building, leased land, condo with insufficient contingency fund | Specialized lender (undivided), tests and repairs before the deed, higher down payment, or withdraw under the inspection condition |
| Procedure | Offer without a financing condition, too short a deadline, late documents, job change or new credit purchase between pre-approval and deed | Always a 7 to 10 business day financing condition; change nothing in your situation before signing |
First the written reason: a verbal refusal cannot be fixed. Then the budget: reduce the debts that weigh on the ratios (a $600 monthly car payment removes about $100,000 of borrowing capacity at the stress rate), the down payment or the price. Then people: a co-borrower (parent, spouse) who goes on title, or a guarantor who does not but answers for the loan. Then time: three to six months are often enough to finish probation, repair a credit file or document the down payment. Finally the alternative ("B") lender: a rate 1% to 3% higher, lender and brokerage fees of 1% to 2%, 20% down, on a one- or two-year term, long enough to become eligible again at a bank lender. A private lender, pricier still, is justified only for a short need with a clear exit.
Written pre-approval before the first showing (see mortgage pre-approval), a financing condition in every offer, no new debt or job change between offer and deed, and a check of the property by the broker before the offer: type of co-ownership, year of construction, sector (pyrite, flooding), certificate of location. A file refused at one lender can be accepted at another the same day, with the same documents: that is the mortgage broker's job, paid by the lender (see who pays the mortgage broker).
Most often for the debt ratios at the stress rate, the credit score or unverifiable income; ask for the written reason, it determines the solution.
Depending on the lender and down payment, often 600 to 680 for an insured loan at a bank lender; below that, an alternative lender with 20% down.
The inquiry counts as an application; several inquiries within 30 to 45 days for the same mortgage are grouped and have little effect.
Not if the offer contained a financing condition and you respected it within the deadlines; yes if you bought without a condition.
To run your own numbers: the commission calculator, our fees and the mortgage calculator. French versions are linked below.
The Loaa & Manseur team, led by Lotfi Manseur and Loaa Al Daow, is the number 1 team at RE/MAX Platine in 2024 and 2025, 6th RE/MAX team in Quebec, 15th in Canada and in the global top 50 of large residential teams according to the official RE/MAX ranking, computed on actual transactions. Its Google profile counts 221 reviews with a 4.9 rating. Its offices are at 55 avenue de l'Équinoxe in Brossard, one bridge from the island, and every broker's licence can be checked in the OACIQ public register. Three things to verify yourself before calling us, and to demand of any other broker.
Also available in French: version française de ce guide.
Published September 7, 2026 by the Loaa & Manseur team, the number 1 team at RE/MAX Platine in 2024 and 2025, 6th RE/MAX team in Quebec, 15th in Canada and in the global top 50 according to the official RE/MAX ranking. Tell us about your project.
Équipe no 1 de RE/MAX Platine en 2024 et en 2025, 6e au Québec, 15e au Canada et dans le top 50 mondial au classement officiel RE/MAX. Réponse en moins de 24 heures, sept jours sur sept.