Then suddenly, the bank came back and said the refinance amount has changed — or worse, it’s no longer enough to solve the problem.
If this just happened to you, you’re not alone.
In Ontario in 2026, refinance approvals are being quietly reduced, revised, or restructured after borrowers think the deal is done. And for many homeowners, this is where refinancing stops working altogether.
Here’s why this keeps happening — and what people are doing when banks move the goalposts.
Yes, This Is Happening a Lot in 2026
Refinance approvals used to be relatively stable once issued.
Today, they’re not.
Across Ontario, borrowers are seeing refinance amounts changed because of:
lower-than-expected appraisals
updated lender risk policies
reworked loan-to-value (LTV) limits
last-minute underwriting reviews
property-type restrictions
Nothing about you may have changed — but the bank’s comfort level did.
The #1 Reason: Appraisals Don’t Support the Original Amount
Banks lend on the lower of appraised value or purchase price.
In 2026, appraisals are:
more conservative
backward-looking
especially tough on condos, rentals, and mixed-use homes
When the appraisal comes in lower than expected, the bank doesn’t renegotiate — it simply reduces the mortgage amount.
For refinances, that can kill the entire purpose of the deal.
Why Refinances Are Hit Harder Than Purchases
With a refinance, there’s no seller adjusting the price.
There’s only math.
If the revised amount:
doesn’t cover debt consolidation
doesn’t clear arrears
doesn’t fund renovations
doesn’t solve the cash-flow issue
Then the refinance technically “approved” — but functionally useless.
This is one of the most frustrating outcomes homeowners face.
Internal Policy Changes You’re Never Told About
Banks don’t announce these publicly, but in 2026 many lenders are:
lowering max LTVs in certain regions
tightening rules on condos and rentals
reducing exposure to non-owner-occupied homes
limiting exceptions for self-employed borrowers
When these changes happen mid-file, the lender’s solution is often to cut the loan amount, not decline outright.
“Final Review” Is Where Things Break
Many borrowers assume the approval letter is final.
In reality, most refinances are conditional until funding.
During final review, lenders may:
re-check liabilities
re-confirm income
reassess risk
revisit valuation assumptions
That’s often when the approved amount gets revised — with very little time to react.
What Homeowners Are Doing When the Refinance No Longer Works
This is where strategy shifts.
When a bank refinance gets reduced, many homeowners move to short-term, equity-based solutions to regain control.
🔹 Second Mortgages
Used to:
top up the shortfall
consolidate remaining debt
avoid restarting the entire refinance process
👉 Related page: /second-mortgages
🔹 Private Mortgages
Private lenders focus on:
true property value
total loan-to-value
exit strategy
Not rigid internal bank limits.
👉 Related page: /private-mortgage-ontario
🔹 Temporary Structures That Actually Solve the Problem
Instead of forcing a broken refinance, borrowers often:
close with a short-term solution
stabilize cash flow
refinance later under better conditions
The goal is functionality, not approval letters.
The Biggest Mistake Borrowers Make
Waiting.
Many homeowners:
accept a reduced amount hoping it’s “good enough”
delay exploring alternatives
run out of time while documents are re-reviewed
By the time they act, options are narrower and costs are higher.
How Lendworth Helps When Refinance Amounts Change
Lendworth works with Ontario homeowners when:
a refinance is approved but reduced
the new amount doesn’t solve the issue
banks keep reworking the numbers
timing matters
We focus on:
equity-first underwriting
realistic loan structures
short-term solutions with clear exits
fast decisions without endless re-approvals
👉 Explore your options here:
https://www.lendworth.ca/borrow
Final Thought
An approved refinance that doesn’t work is not a solution.
In 2026, more homeowners are realizing that when banks change the amount, it’s not a personal failure — it’s a policy shift.
The key is adapting before the refinance stalls your entire plan.