Canadian Mortgage Charter: What Your Bank Is Expected to Do If You're Struggling

The Canadian Mortgage Charter sets out what the federal government expects banks and other federally regulated lenders to do for people who are having trouble paying the mortgage on their home. It was introduced in the 2023 Fall Economic Statement. This page lists what it includes and how to use it.

What the Charter includes

According to the Financial Consumer Agency of Canada (FCAC), the Charter includes:

1. Temporary extensions of the amortization period for those at risk.
2. Waiving fees and costs associated with relief measures for a limited period.
3. Letting insured mortgage holders switch lenders at renewal without requalifying under the minimum qualifying rate.
4. Proactive contact from lenders about renewal options 4 to 6 months in advance.
5. Options for homeowners at risk to make lump-sum payments, or sell their home, without prepayment penalties.
6. No interest charged on interest during periods of negative amortization.

The Charter builds on FCAC’s earlier guideline on existing mortgages in exceptional circumstances. FCAC notes that the Charter speaks of “mortgage holders in financial difficulty”, a broader group than the guideline’s “consumers at risk of mortgage default”. The switching rule was extended to uninsured mortgages by OSFI; see the stress test and renewals.

Who it covers

The Charter sets expectations for federally regulated financial institutions, such as banks, for mortgages on your principal residence. FCAC supervises their compliance. Provincially regulated lenders, such as most credit unions, fall under their provincial regulator.

How to use it

• Contact your lender early, before you miss a payment. FCAC says lenders are expected to offer relief measures suited to your circumstances.
• Ask about the options: a temporary amortization extension, a payment deferral, a lump-sum payment without a penalty, or converting a variable rate to fixed. Relief can raise the total you pay over the life of the mortgage.
• Get any agreement in writing.
• Complain if needed. Use your bank’s complaint process first. If that doesn’t resolve it, go to the Ombudsman for Banking Services and Investments (OBSI), the single external complaints body for federally regulated banks since November 1, 2024.

Related pages

• Mortgage arrears and relief options
• Foreclosure and power of sale by province
• Payment shock at renewal
• Recent mortgage rule changes
• Mortgage rules and regulations