Missing one mortgage payment doesn’t mean losing your home, but the consequences build the longer the arrears last: fees and interest first, then damage to your credit, and eventually a lender’s legal right to sell the property. The earlier you contact your lender, the more options you have. This page sets out what happens at each stage and what you can do. Other changes during your term, such as deferrals and payment increases, are covered in the renewal and term-changes hub.
What happens after a missed payment
| Stage | What usually happens |
|---|---|
| The payment is missed | Interest keeps running on the full balance; the lender may charge a fee for a returned payment or a late payment, as your mortgage contract sets out |
| The first weeks | The lender contacts you by phone, email or letter and asks you to bring the account up to date |
| One month or more late | The late payment can be reported to the credit bureaus (Equifax and TransUnion) and stays on your credit file |
| Two or three payments missed | The account moves to the lender’s collections or special accounts team; formal demand letters follow |
| Continued default | The lender may use the acceleration clause in the mortgage, which makes the whole balance due, and hand the file to its lawyers |
| Enforcement | The lender starts power of sale or foreclosure under your province’s rules |
| Sale | The property is sold; the proceeds pay the mortgage, arrears and costs first, and any surplus goes to you |
Lenders differ in how quickly they move between stages, and your mortgage contract sets the fees and the default terms.
Late fees and interest
Interest is charged on the unpaid balance whether or not you make the payment, so missed payments make the mortgage cost more. Late or returned-payment fees are set by your lender and your contract; a private lender may also charge a higher rate of interest while the mortgage is in default, if the contract allows it. Ask your lender for the amount needed to bring the account up to date, including any fees.
Effect on your credit
A mortgage payment reported as late is one of the more damaging items on a credit file, and it stays there for years. How much your score drops depends on the rest of your file. What hurts your credit score ranks the factors and how long each lasts.
A relief arrangement agreed with a bank is treated differently: If the lender agrees that you can miss payments as part of the relief, it's expected not to report them to the credit bureaus.
Power of sale and foreclosure by province
How a lender enforces a mortgage depends on the province:
- Ontario uses power of sale. Under the Mortgages Act, the lender can’t give notice of sale until the default has lasted at least 15 days, and can’t sell until at least 35 days after the notice; before the sale you can pay the arrears and costs and stop it.
- British Columbia uses a court foreclosure; the default redemption period is 6 months.
- Alberta and Saskatchewan use court processes, and for many mortgages the lender’s claim is limited to the property itself.
- Quebec uses hypothecary rights; the lender registers a prior notice and you have 60 days to pay or give up the property.
The full process for each province, including whether a lender can pursue you for a shortfall after the sale, is on the mortgage foreclosure process in Canada page and in recourse vs non-recourse mortgages.
Relief your lender is expected to offer
Banks and other federally regulated lenders are expected to work with you when you are at risk of default. If you're at risk of mortgage default and working with your lender on a solution, a federally regulated lender such as a bank is expected to offer relief suited to your circumstances: for example a payment deferral (usually up to 4 months), waived prepayment penalties on a lump-sum payment that avoids negative amortization or when you sell your home, waived internal fees and no interest on interest for a limited period, or a longer amortization with a plan to restore it. Relief can raise what the mortgage costs in total. The Canadian Mortgage Charter page covers these expectations and the other protections for borrowers at federally regulated lenders. Credit unions and other provincially regulated lenders set their own policies, so ask yours what it offers.
What to do
Before you miss a payment
| Action | Why it helps |
|---|---|
| Call your lender now | Lenders have more options for borrowers who call before a payment is missed |
| Ask about relief | A payment deferral, a temporary change to the payment, or a longer amortization (extending your amortization) |
| Check your insurance | Creditor job-loss or disability coverage on the mortgage may pay for a period |
| Look at savings | TFSA withdrawals aren’t taxed; RRSP withdrawals are taxable income |
If the cause is a job loss, can I keep my house if I lose my job? covers EI, the order to use your savings in and what to ask your lender.
After one or two missed payments
| Action | Why it helps |
|---|---|
| Pay the arrears as soon as you can | The sooner the account is current, the less damage to your credit |
| Ask for a repayment plan | Spreading the arrears over several months on top of your regular payments |
| Explain the cause, with documents | A layoff letter or medical note helps the lender agree to relief |
| Talk to a mortgage broker | If you have equity, a refinance with another lender, such as a B lender, may lower the payment |
| Talk to a non-profit credit counsellor | Free advice on a budget and other debts |
After several missed payments
| Option | When it fits |
|---|---|
| Sell the home yourself | Selling on your own terms usually gets a better price, with lower costs, than a sale by the lender |
| Refinance on your equity | A private mortgage or B-lender refinance can pay the arrears, at a higher rate |
| Get legal advice | A real estate lawyer can explain your rights and the timeline in your province |
| A consumer proposal or bankruptcy | If your other debts are the real problem; a licensed insolvency trustee explains both (insolvency guide) |
| Stay in the home and maintain it | A vacant or neglected property sells for less |
Recovering afterwards
Once the account is current, each on-time payment rebuilds your payment history, and lenders look at how long it has been since the last late payment. Borrowing again soon after arrears often means a B lender or private lender at a higher rate, moving back to a bank as your record improves; getting a mortgage after a consumer proposal and mortgage after bankruptcy cover those cases.
Preventing missed payments
| Approach | How it helps |
|---|---|
| Automatic payments | The payment comes out of your chequing account on schedule |
| An emergency fund | Covers the payment through a short loss of income (how much emergency fund) |
| Matching the payment schedule to your pay | A payment frequency that lines up with payday |
| Leaving room in the budget | Borrowing less than the maximum leaves room for a rate increase or a drop in income |
| Your own insurance | Disability insurance replaces income if you can’t work; mortgage life insurance vs term life compares lender coverage with your own policy |
Related pages
Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and September 29, 2026. How we check facts.
- Dial-A-Law (People's Law School): Know your rights if you're facing foreclosure | Dial-A-Law
- Éducaloi: Hypothecs | Éducaloi
- Financial Consumer Agency of Canada: Mortgage relief options
- Financial Consumer Agency of Canada: Paying your mortgage when experiencing financial difficulties
- Ontario e-Laws: Mortgages Act