Why Did My Credit Score Drop After Paying Off a Mortgage?
Discover why your credit score can dip after paying off a mortgage in Canada, and learn how to stabilize it quickly.
Paying off your mortgage should feel like a victory, and it is. But many Canadians are surprised to see their credit score drop shortly after making their final payment. Don’t panic — this dip is normal, temporary, and explainable.
📉 Why Scores Sometimes Drop After a Mortgage Payoff
- Mortgages are a major type of “installment credit.” Once gone, your credit mix may look thinner.
- If your mortgage was your oldest account, average credit history length drops.
- A closed mortgage is marked as “paid and closed” — positive, but not active.
✅ The Good News: It’s Still Positive
- A paid-off mortgage stays on your report for up to 10 years as positive history.
- The score dip is usually small (20–40 points) and temporary.
🔧 What You Can Do To Offset the Dip
- Keep credit cards active and balances low (<30%).
- Avoid unnecessary hard inquiries.
- Consider diversifying with a small loan or line of credit.
🕒 How Long Until Your Score Rebounds?
- Recovery usually takes a few months as other accounts age and positive history continues.
📌 Takeaway
Your credit score might dip after paying off a mortgage, but it’s not a sign of trouble. Keep using your other credit responsibly and it should stabilize.
