But in Ontario in 2026, a growing number of buyers and homeowners are discovering a harsh reality:
mortgage approvals are being cancelled — sometimes days before closing.
If this just happened to you, you’re not alone. And more importantly, your deal may not be dead.
Here’s why this is happening, what it really means, and how many people are still closing despite last-minute cancellations.
Yes — Mortgage Approvals Are Being Cancelled in 2026
This isn’t a rumour. It’s not rare. And it’s not always your fault.
Across Ontario, lenders are cancelling approvals due to:
low or revised appraisals
last-minute document reviews
internal policy changes
funding risk reassessments
non-traditional or self-employed income
condo or property-specific restrictions
What used to be a “formality” between approval and funding is now a second underwriting stage.
Why Banks Are Pulling Back After Approval
Banks in 2026 are operating very differently than they did even a few years ago.
🔻 Appraisals Are Overruling Approvals
If the appraisal comes in lower than expected, the bank doesn’t renegotiate — it reduces or cancels the mortgage.
This is especially common with:
Toronto condos
investor properties
mixed-use or unique homes
📄 “Final Review” Isn’t Final Anymore
Many borrowers are shocked to learn that:
income can be re-verified
liabilities can be re-checked
conditions can be added back
An approval is often conditional until funding, even if it didn’t feel that way.
🏦 Internal Risk Rules Change Fast
Banks are quietly:
reducing exposure in certain areas
tightening condo lending
limiting exceptions
cancelling files that no longer fit updated rules
You didn’t change — the lender did.
What Happens If a Mortgage Is Cancelled Before Closing?
This is where things get serious.
If a deal doesn’t close on time, buyers may face:
loss of deposit
legal action from the seller
bridge loan penalties
forced short-term borrowing
credit and legal consequences
Waiting for the bank to “reconsider” often means running out the clock.
How Buyers Are Still Closing After a Mortgage Is Cancelled
This is the part most people don’t hear about.
✅ Short-Term, Equity-Based Financing
When banks cancel late, borrowers often turn to short-term solutions that focus on:
property value
available equity
loan-to-value (LTV)
a clear exit plan
This allows the deal to close now, not weeks later.
⚡ Speed Beats Rate Near Closing Day
When a deal is at risk, the priority is:
closing on time
protecting deposits
avoiding legal fallout
Many borrowers refinance back to traditional lenders later — once the pressure is gone.
The Biggest Mistake People Make
The most common (and costly) mistake is waiting too long.
Borrowers often:
assume the bank will fix it
delay exploring alternatives
wait until the deal is already in default
At that point, options shrink and costs rise.
When You Should Act Immediately
You should seek help right away if:
your mortgage was approved then cancelled
your lender reduced the mortgage amount
your appraisal came in low
your closing is under 30 days away
your lender keeps “re-reviewing”
Time, not credit, is usually the real enemy.
How Lendworth Helps Save Deals in Ontario
Lendworth works with Ontario buyers and homeowners when:
a bank mortgage falls apart
closing day is approaching
timing matters more than paperwork
We focus on:
equity-based underwriting
short-term structures (often 6–12 months)
realistic exit strategies
fast, clear decisions
👉 Get help before the deal collapses:
https://www.lendworth.ca/borrow
Final Thought
A cancelled mortgage approval doesn’t mean your deal is dead.
In 2026, it often means the lender changed — not your situation.
The borrowers who close are the ones who act quickly, understand their options, and don’t wait for the bank to change its mind.