diff --git a/vcsserver/remote/hg_remote.py b/vcsserver/remote/hg_remote.py
--- a/vcsserver/remote/hg_remote.py
+++ b/vcsserver/remote/hg_remote.py
@@ -524,7 +524,7 @@ class HgRemote(RemoteBase):
                     "Verifying if URL is a Mercurial repository: %s", obfuscated_uri)
                 # Create repo path with custom mercurial path object
                 ui = make_ui_from_config(config)
-                repo_path = hg_path(ui=ui, rawloc=safe_bytes(test_uri))
+                repo_path = hg_path(ui=ui, rawloc=safe_bytes(url))
                 peer_checker = make_peer(ui, repo_path, False)
                 peer_checker.lookup(b'tip')
         except Exception as e: