Mortgages and a Consumer Proposal: Renewing, Refinancing, and Buying a Home

Written and built by a Licensed Insolvency Trustee with a legal and finance background. No fees for advice. No referrals for sale. The light is on.

If you are in a consumer proposal, thinking about filing one, or have recently finished one, your mortgage may be one of your biggest worries.

You may be asking yourself:

• Will my bank renew my mortgage?
• Can I keep my home?
• Can I refinance?
• Will I be able to buy a home again?

Those are normal questions. A consumer proposal can affect your credit and future borrowing, but it does not automatically put your home or mortgage at risk. The most important thing is to understand the difference between your existing mortgage, a mortgage renewal, refinancing, and applying for a new mortgage.

Those are not all the same thing.

First Things First: What a Consumer Proposal Does and Does Not Do

People searching for an answer to this question often put it very simply: “does consumer proposal affect mortgage renewal?”

The short answer is that a consumer proposal and a mortgage operate very differently.

A consumer proposal deals primarily with unsecured debt. Your mortgage is secured against your home and, if you continue making the mortgage payments, it normally continues outside the proposal.

That distinction explains almost everything that follows in this article.

That includes debts such as:

• credit cards
• unsecured lines of credit
• unsecured loans
• income tax debt

A mortgage is different. A mortgage is a secured debt because the lender has security against the property.

A consumer proposal does not automatically include your mortgage. It does not change your interest rate, your term, or your monthly payment. As long as the payments stay current, the mortgage continues outside the proposal and you keep the home.

What a proposal can reach is a shortfall. If the home is later sold for less than the mortgage balance, the unpaid remainder stops being secured debt and becomes ordinary unsecured debt.

Whether the proposal covers that shortfall turns on timing, and the rule is specific. Your creditors’ claims are fixed on the day the proposal is filed. The proposal binds every unsecured claim as it stands that day, and it binds a secured creditor only where that creditor has valued its security and filed a proof of claim. So if you are surrendering a property, the shortfall is compromised only if the lender comes into the proposal for it. Leave it unaddressed, and the loss crystallizes months later on a sale, after the claims date, and the lender may argue it was never caught.

That is a fight worth avoiding. If you are giving up a property, tell us before the proposal is drafted, so the lender can be put to its proof and the shortfall dealt with inside the proposal rather than after it.

If you are keeping the property, the rule is simpler. Keep the mortgage payments current.

A Consumer Proposal Does Not Take Away Your Home

Many people confuse a consumer proposal with bankruptcy.

They are not the same.

In a bankruptcy, a person’s property may pass to the trustee, subject to exemptions and any arrangements made with the trustee regarding non-exempt assets.

A consumer proposal works differently.

When you file a consumer proposal, you keep legal ownership of your assets, including your home. The proposal is an arrangement to settle unsecured debts with your creditors. It is not a surrender of your property.

Filing also starts an automatic pause on collection. It is called a stay of proceedings, and it stops your unsecured creditors from continuing to pursue you.

A secured mortgage lender sits mostly outside that pause.

That does not mean your mortgage can be ignored. The mortgage lender is still a secured creditor. If you miss mortgage payments, the lender can rely on its ordinary mortgage remedies. The consumer proposal does not give you a new payment holiday or a cure period on the mortgage.

A payment you miss during the proposal is a new default on a debt that sits outside the proposal. The stay does not stop the lender from acting on it.

So the practical advice is simple.

If you want to keep your home, treat the mortgage as the first bill you pay each month.

Another page deals with whether you can keep the home you already own, whether you can sell it during a proposal, and how home equity may affect what your proposal costs. Those are asset and proposal-payment questions, not mortgage-credit questions. Disadvantages of consumer proposal filings: the real consequences, fear by fear carries “can I keep my house” and “can I sell my house during a proposal,” and How a consumer proposal payment is calculated explains the equity calculation. To put your own equity and debts against that arithmetic, the Consumer Proposal Calculator, Level 1: Years to Pay Off Debt and the Consumer Proposal Calculator, Level 2: Monthly Payment Amount work it through. The month-by-month shape of the process itself is on the timeline page.

This page deals with the mortgage-credit questions: renewing your mortgage, refinancing, getting a new mortgage while in a proposal, and buying a home after the proposal is complete.

Put differently, if you are asking how a consumer proposal affects mortgage renewal, the answer depends first on what you mean by mortgage renewal.

Renewing with your existing lender is very different from refinancing the mortgage or moving it to a new lender.

Renewing Your Existing Mortgage

For most homeowners, renewing an existing mortgage with the current lender is the least dramatic mortgage issue in a consumer proposal.

That may surprise you, because renewal is often what people worry about most.

The common question is:

Will my bank refuse to renew my mortgage because I filed a consumer proposal?

In most cases, if your mortgage payments are current and you are renewing with your existing lender, the renewal is expected to proceed in the ordinary way.

The reason is practical. You are not usually asking the lender for more money. You are continuing a mortgage the lender already holds, secured by a property the lender already accepted. The lender already has a payment history with you.

That makes renewal very different from applying for a brand-new mortgage.

No one measures how often that goes smoothly for someone in a consumer proposal, so there is no reliable statistic to quote. What follows is the protection you actually have.

Filing a Proposal Is Not a Mortgage Default

While your current mortgage term is still running, the lender cannot call, cancel, or accelerate the mortgage just because you filed a consumer proposal.

The filing itself is not a mortgage default.

If you keep paying the mortgage as agreed, the mortgage normally continues on its existing terms until the renewal date.

This is why the payment history matters so much. A consumer proposal does not usually create the mortgage problem. Missed mortgage payments can.

The Lender Must Give Advance Notice

Homeowners often worry that the bank will wait until the last minute and then refuse to renew.

That is not how the renewal process is supposed to work.

For federally regulated lenders, which usually means banks, the lender must provide renewal information before the mortgage term ends. If the lender intends to renew, it must provide a renewal statement at least twenty-one days before the end of the term. If it does not intend to renew, it must tell you in writing at least twenty-one days ahead.

In Ontario, a mortgage arranged through a broker or private lender follows the same twenty-one day structure.

This does not force a lender to renew. It does mean the decision should not arrive as a surprise on the renewal date.

What I Have Seen in Practice

This is a question I hear often.

In my experience as a Licensed Insolvency Trustee, I have never had a client tell me that an existing conventional bank lender refused to renew a mortgage that was being paid as agreed simply because the client had filed a consumer proposal or a bankruptcy.

That is not a guarantee. Every lender makes its own decisions, and every file is different.

But it is worth keeping the concern in perspective. People worry about this situation much more often than I have seen it actually happen.

Why Staying With Your Existing Lender Is Usually the Simpler Path

A straight renewal with your existing lender is not usually treated like a brand-new mortgage application.

The federal banking regulator has stated that it does not expect the mortgage stress test to be re-applied when you renew with the lender you already have. The reason is straightforward. That lender has already done its own review of you and already holds the mortgage.

So, on a straight renewal, the question is usually what term and rate the lender will offer, not whether you would qualify as a brand-new borrower today.

That is why staying with your existing lender is often the simplest option during or shortly after a consumer proposal.

The rules have also become somewhat more favourable for borrowers. Since November 21, 2024, the federal banking regulator no longer expects lenders to apply the stress test to a straight switch to a new lender at renewal where the mortgage is uninsured and the loan amount and amortization are unchanged.

That does not mean switching lenders is always easy. A new lender will still review your file. But a homeowner with a clean mortgage payment history may have more options than older advice sometimes suggests.

Market conditions in this article are described as of mid-2026.

Why Lenders Often Want to Keep a Paying Mortgage Customer

From a practical standpoint, a mortgage that is being paid on time is an asset to the lender.

The lender has already advanced the money. The mortgage is already in place. If the payments have been made as agreed, the lender often has a reason to keep that customer.

The federal government’s own consumer guidance says a renewal can happen automatically if you do nothing before the term ends. No rule requires a lender to put you through a full new review just to keep a mortgage it already holds.

A renewal rate may also be negotiable. If affordability has become a problem, some lenders may be willing to discuss options such as extending the amortization to reduce the monthly payment. No lender is required to offer that type of relief, but it may be worth asking if payment pressure is real.

The main point is that a consumer proposal on your credit file does not usually change the basic reality of a straightforward renewal with the current lender.

If Your Current Lender Does Not Renew

It is still important to be honest about the boundary.

The law does not force a lender to offer a new term when the old term ends. A lender could, in principle, decline to renew or offer renewal terms that are less attractive.

If that happens, it does not mean you are out of options.

Canada has an alternative mortgage market for borrowers who do not fit a major bank’s current lending rules. Mortgage brokers often help homeowners access those lenders.

These mortgages usually come with higher interest rates, lower loan-to-value limits, and additional fees. They are often used as a bridge while the borrower’s financial position improves and credit is rebuilt.

This article does not quote rates for that market because they change often. The important point is that a refusal from one lender does not necessarily mean there is no mortgage option at all.

Situations That Are Not Simple Renewals

This is where many homeowners get confused.

Renewing your existing mortgage, switching lenders, and refinancing are different things.

A consumer proposal may matter very little in one situation and much more in another.

Switching Lenders

Switching lenders is not the same as renewing with your current lender.

If you move your mortgage to a different lender at renewal, the new lender will treat you as a new borrower. That means a new application, a new review, and a fresh look at your income, credit report, property, and overall financial situation.

Your credit report will show the consumer proposal notation, and the new lender may consider that when deciding whether to approve the mortgage and what rate to offer.

So the lower rate you hoped to get from a new lender may not be available while the proposal is active or recent.

That does not mean switching is impossible. It means the decision should be planned with a mortgage professional and not left until the renewal deadline.

Refinancing

Refinancing is also different from renewing.

When you refinance, you are usually asking for new money or new mortgage terms. You may be increasing the mortgage, accessing equity in the home, consolidating debt, or breaking the existing mortgage to arrange a different loan.

Because new borrowing is involved, the lender will usually review the file more closely.

That review may include:

• your income
• your monthly obligations
• your credit report
• the amount of equity in the home
• your mortgage payment history
• the details of any active or recently completed consumer proposal

For that reason, refinancing during an active or recent consumer proposal is often more difficult than a simple renewal.

It is not always impossible. A homeowner with strong income, substantial equity, and a good mortgage payment history may still have options, especially through a mortgage broker who works with more than one type of lender.

But refinancing should not be treated as automatic.

If you are thinking about refinancing during a proposal, speak with your mortgage professional and your Licensed Insolvency Trustee before making plans around money that has not yet been approved.

Collateral Mortgages and Same-Bank Debt

There is one more caution.

If your mortgage lender also holds unsecured debt that was included in your consumer proposal, such as a credit card or unsecured line of credit at the same bank, the situation can be more complicated.

The same is true if you signed a collateral mortgage or an all-indebtedness mortgage that may secure more than just the basic mortgage loan.

Those documents can affect what is secured, what is unsecured, what sits inside the proposal, and what remains outside it.

If this applies to you, have the mortgage documents reviewed before relying on any general explanation.

The Practical Takeaway on Renewal, Switching, and Refinancing

If you are renewing with your current lender and your mortgage payments are current, the renewal is usually expected to proceed.

If you are switching lenders, the new lender will treat you as a new applicant.

If you are refinancing, you are asking for new borrowing, and the proposal may matter more.

The safest path during or shortly after a consumer proposal is usually to keep the existing mortgage current and avoid unnecessary changes unless there is a clear reason to make them.

Can You Get a Mortgage With a Consumer Proposal That Is Still Active?

Can you get a mortgage with a consumer proposal that is still active? It is harder than renewing an existing mortgage.

The answer is not always no, but it depends heavily on the size of your down payment, the type of mortgage, your income, and the lender’s own rules.

The main dividing line is mortgage default insurance.

If you have less than twenty percent down, the mortgage is usually a high-ratio mortgage. A bank cannot make that type of mortgage without mortgage default insurance from CMHC or one of the private insurers.

If you have twenty percent or more down, the mortgage is usually a conventional uninsured mortgage.

In practice, an insured mortgage during an active proposal is rarely available. One insurer publishes criteria that mention consumer proposals, but the criteria refer to completed proposals. An active proposal has not yet fulfilled its terms. Other published insurer materials do not set out a clear consumer-proposal rule. No public rule says every insured mortgage during an active proposal is prohibited, but the practical result is that most people find the insured route waits until the proposal is complete and credit has been rebuilt.

A larger down payment may move the application into uninsured lending. In that part of the market, individual lenders have more discretion. Some lenders may consider an application during a proposal if there is substantial equity or a large down payment, stable documented income, and a strong explanation of the circumstances. Other lenders will not.

This is lender-by-lender territory.

It is not something to plan around based on a general internet rule. It is a conversation to have with a mortgage broker who understands proposal files, together with a clear explanation from your Licensed Insolvency Trustee of where the proposal stands.

This article will not give you a lender approval threshold and call it a rule. Some minimum requirements exist in regulation, including minimum down payment rules and credit-score benchmarks for insured mortgages. What is not fixed in one public rule is the exact score, down payment, or waiting period a particular lender will require from you.

The reliable summary is this:

An insured mortgage usually waits until the proposal is complete and credit is re-established.

An uninsured mortgage may be possible during a proposal, but it depends on the lender, the down payment, equity, income, and the full file.

The specific answer belongs to the lender and insurer reviewing your application at the time you apply.

Buying a Home After Completing a Consumer Proposal

Yes, people get mortgages after completing a consumer proposal.

Buying a home again is a realistic goal. A consumer proposal is meant to help you deal with debt and move forward. It is not meant to permanently block you from home ownership.

That said, the process usually takes time.

After a proposal, lenders usually look closely at three things:

• the proposal notation on your credit report
• the credit you have rebuilt after completion
• your income and down payment

Your Credit Report

A completed consumer proposal remains on your credit report for a period of time after completion. Lenders and mortgage insurers can see it.

The notation does not disappear the day the proposal is finished.

The difference between a credit report, a credit score, and how long proposal information remains on a credit file is covered separately at Your credit after a consumer proposal or bankruptcy: R7, R9, and the honest answers.

For mortgage purposes, the short version is this: lenders want to see that the proposal is complete and that you have rebuilt credit afterward.

Re-Established Credit

Re-established credit matters.

That usually means obtaining modest credit after the proposal, often a secured credit card, using it carefully, keeping balances low, and making every payment on time.

This is what moves a person from recently completed a consumer proposal to rebuilt credit history.

It is not instant. It takes time. But it is one of the most important parts of qualifying for better mortgage options after a proposal.

Income and Down Payment

A consumer proposal does not change your income or your down payment.

Those are still major factors in any mortgage application.

Lenders want to know whether the mortgage is affordable. They will look at income, debt levels, payment history, property value, and down payment. A strong income and meaningful down payment can make a real difference, even where there has been a past proposal.

Your First Mortgage After a Proposal May Not Be With a Bank

A major bank is not the only possible mortgage lender.

Canada’s mortgage market includes banks, credit unions, mortgage investment corporations, and private lenders. The lenders outside the major banks are not bound by the same federal banking rules.

In our experience, borrowers who recently completed a consumer proposal may sometimes re-enter the mortgage market through a non-bank or alternative lender. These lenders often charge higher interest rates and fees and may lend at lower loan-to-value limits.

For many borrowers, that kind of mortgage is a bridge. The goal is often to keep rebuilding credit and eventually move back to a mainstream lender when the file is stronger.

This article does not quote rates because they change constantly. The point is that the mortgage market is wider than the major banks.

Insured Mortgages After a Proposal

For an insured mortgage, federal rules generally require at least one borrower or guarantor to have a credit score of at least 600, although there is a limited exception. Sagen, one of the private mortgage insurers, publishes a minimum credit score of 600 in its criteria. CMHC’s published criteria did not state a minimum score when last checked.

That does not mean a score of 600 guarantees approval.

Neither the regulation nor CMHC’s published criteria create a separate consumer-proposal credit-score rule that guarantees a mortgage after completion.

One private insurer publishes a criterion that refers to completed consumer proposals. It asks for the proposal terms to have been fulfilled for at least two years and separately asks for at least two years of re-established credit. Other insurers do not publish the same waiting period.

Beyond that, approval depends on the lender and insurer reviewing the file.

Because the number is discretionary, it is better to ask a mortgage professional what applies to your actual situation rather than relying on a general figure online.

When a Lender Treats a Proposal Like a Bankruptcy

A consumer proposal and a bankruptcy are different in law. They are also different on a credit report.

Even so, some lenders may treat them similarly in their internal underwriting.

That is lender practice, not a single rule that applies to the whole market. No source measures how many lenders actually do it, so nobody can tell you how common it is.

Ontario mortgage-broker suitability guidance also lists consumer proposals alongside bankruptcy as something a broker should consider when assessing whether a mortgage is suitable for a borrower. That does not prove every lender treats the two the same way. It means the issue belongs in the lender and broker review of the file.

The practical response is not to assume every lender will say no.

It is to shop the file properly.

A mortgage broker who understands consumer proposals may know which lenders are more willing to consider a completed proposal and which lenders are likely to treat it more like a bankruptcy.

Frequently Asked Questions

Final Practical Takeaway

A consumer proposal does not automatically put your home at risk.

If you already own a home and want to keep it, the most important thing is to keep the mortgage current.

If your mortgage is coming up for renewal with your current lender, the renewal is usually much less concerning than people expect.

If you are switching lenders, refinancing, or applying for a new mortgage, expect a closer review.

If you have completed a proposal and want to buy a home again, the path is usually completion, credit rebuilding, stable income, and a workable down payment.

The mortgage is one piece of a larger decision. The Consumer Proposal Resource Centre carries the rest of it.