Imagine waking up one morning to realize you forgot to make your mortgage payment. It’s only one month — but soon you receive another call, a notice, maybe even a late fee. In Canada, missed mortgage payments are one of the fastest ways to trigger serious consequences: credit score damage, lender action and even risk of losing your home. According to Financial Consumer Agency of Canada (FCAC), federally regulated lenders are supposed to offer support when homeowners face financial difficulties.
If you’re facing a missed mortgage payment, take action immediately to minimize consequences.
A missed mortgage payment can create stress and uncertainty, but knowing your options can help alleviate some of that pressure.
Missing a mortgage payment can lead to severe consequences, and understanding these impacts is critical for every homeowner.
In this article you will learn:
Understanding the process surrounding a missed mortgage payment is crucial for maintaining financial stability.
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What defines a missed mortgage payment in Canada and how quickly a lender acts
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The immediate and long-term consequences of missing a payment
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Your rights and relief options under Canadian law
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A detailed step-by-step action plan to recover and stay on track
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Real-life examples of homeowners who missed payments and turned things around
Learn from those who successfully navigated the challenges of a missed mortgage payment. If you’ve missed a payment already or are worried you will, this guide will help you act with clarity and make decisions that protect you and your home.
Understanding common pitfalls after a missed mortgage payment can help you avoid further issues.
1. How Much Time Do You Have If You Miss a Mortgage Payment?
Knowing what options are available after a missed mortgage payment is vital for homeowners.
1.1 Understanding the grace period
Most Canadian mortgage agreements include a short grace period — often 10 to 15 days — before a payment is officially “missed,” but exact terms depend on your lender. After that deadline, you may trigger late fees or be considered in arrears.
1.2 When a payment becomes “missed”
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Day 0: Payment due date passes.
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Day 15-30: Lender may charge late fee, report to credit bureau, call you.
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Day 30+: Arrears status, lender may mark account as in default or initiate steps.
1.3 Provincial differences and legal timeline
In Ontario for example, the lender may begin a power-of-sale process after continuous arrears (typically several months), whereas other provinces may use foreclosure.
1.4 Case Study #1
John in Ottawa missed his April payment due to job loss. He paid by May 5 (within his lender’s grace period) and avoided late reporting. But in June he missed again and by July his lender flagged him and began collection calls. His credit score dropped 40 points by month end.
2. Consequences of a Missed Mortgage Payment
Consequences can escalate quickly after a missed mortgage payment, making it essential to stay informed.
2.1 Late fees and penalty charges
Even one missed payment can trigger a late fee (commonly $25-$150) and added interest cost.
Late fees are just one of the repercussions of a missed mortgage payment that can affect your finances.
2.2 Credit report impact
A late payment may be reported after 30 days. This can lower your credit score, making future borrowing more costly.
2.3 Risk of default, power of sale or foreclosure
According to FCAC, “Defaulting on your mortgage happens when you don’t follow the terms of your mortgage agreement, like missing a regular payment.” Continued arrears may lead to the forced sale of your home.
If you miss a mortgage payment, it is crucial to understand how default can affect your home.
2.4 Financial impact of negative amortization
Negative amortization can occur if you miss a mortgage payment and fail to address the situation promptly.
If your payment doesn’t cover interest (often with variable rate increases), your principal can grow. FCAC warns this could result in owing more than your home’s value. Homeowners have to ensure they are putting sufficient payments towards their mortgage to ensure they are paying down the principal to ensure they do not end up with a negative amortization.
2.5 Case Study #2
Sara in Ontario had a variable-rate mortgage. In 2023 interest rose and her payment covered only interest. She missed two payments, the lender capitalized unpaid interest, and her balance grew from $450,000 to $465,000 in six months. She negotiated relief before power of sale started.
3. Your Rights and Relief Options in Canada
3.1 What the FCAC expects of lenders
The FCAC guideline states federally-regulated institutions must offer tailored support to clients at risk of default. Measures may include waiving certain fees, extending amortization or offering payment deferral.
Understanding your lender’s responsibilities after a missed mortgage payment is key to seeking relief.
3.2 Relief measures you should ask about
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Mortgage payment deferral or “skip a payment”.
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Changing your mortgage from variable to fixed rate.
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Extending amortization period to lower monthly payments.
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Combining multiple payments into a payment plan.
3.3 How to approach your lender proactively
Proactively addressing a missed mortgage payment can significantly improve your situation.
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Contact your lender before you miss a payment if possible.
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Explain your situation honestly and ask for relief options.
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Request a written agreement outlining any new terms.
3.4 Case Study #3
David in Calgary lost hours at his small business. He called his bank, explained the situation, and negotiated a 4-month interest-only payment plan. He paid off arrears by month 4 and avoided credit reporting of the missed payments.
4. Step-by-Step Action Plan to Recover After a Missed Payment
Acting promptly after a missed mortgage payment can help you regain control of your finances.
4.1 Step 1: Make the payment (or as much as possible) immediately
Even partial payment shows good faith.
4.2 Step 2: Budget review and cash-flow adjustment
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List all income and expense items.
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Identify cuts: e.g., subscription services, dining out, insurance review.
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List how much you need to keep current: mortgage + property tax + utilities.
Keeping track of your finances helps prevent a missed mortgage payment in the first place.
4.3 Step 3: Contact lender and agree on a plan
Bring your budget, show how you’ll make up arrears, ask for a written relief plan.
4.4 Step 4: Stay current from now on
Even one more missed payment places you further at risk. Set up autopay or reminder.
4.5 Step 5: Rebuild your credit and financial buffer
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Ensure payments on all accounts are on time.
Consider seeking financial advice to avoid a missed mortgage payment and its consequences.
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Consider building an emergency fund (even $100/month adds up).
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Avoid taking new high-interest debt.
4.6 Preventative tools and tips
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Use banking alerts for low balance or upcoming date.
- Consider a home equity loan or second mortgages to help alleviate financial stress to stay on top of missed mortgage payments
4.7 Example checklist
Regularly reviewing your budget can help prevent a missed mortgage payment situation.
Setting up auto-pay can be a great way to prevent a missed mortgage payment.
| Action | Timeline | Why it matters |
|---|---|---|
| Call lender | Within 1 week of missed payment | Early contact improves chances of relief |
| Submit budget | 2 weeks | Shows you’re serious |
| Follow relief agreement | ASAP | Keeps you in good standing |
| Set auto-payment | 1 month | Prevents future slips |
5. If You Continue Falling Behind: What Happens Next?
Understanding the risks of a missed mortgage payment can guide your financial decisions.
5.1 Ongoing arrears lead to formal collections
Multiple missed payments often trigger lender escalation.
5.2 Power of sale vs foreclosure – Canadian variation
In Ontario, lenders often use the power-of-sale method rather than foreclosure. The time from initial arrears to sale can vary depending on the file and property.
5.3 Legal fees and selling costs add up
By the time a home is repossessed or sold by the lender, homeowner often owes not only mortgage arrears, but legal fees, taxes and possible shortfall after sale.
5.4 Exit strategy options
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Voluntary sale of home before lender does
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Refinancing with help of a specialist broker like TurnedAway.ca
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Negotiated deed-in-lieu of sale or mortgage assumption (less common)
Options such as refinancing can help if you face a missed mortgage payment.
- Leverage a home equity loan to catch up on mortgage arrears.
*Not sure how much equity you may be able to leverage to refinance or get a home equity loan? Try our handy home equity calculator to see how much you may be able to borrow.
5.5 Table: Timeline of escalating risk
| Arrears Days | Action by Lender | Your Risk Level |
|---|---|---|
| 30–60 days | Late fee, credit bureau report | Moderate |
| 60–120 days | Letters, phone calls, default warning | High |
| 120+ days | Legal proceedings begin (power of sale/foreclosure) | Very High |
6. Long-Term Impacts & Prevention Strategies
6.1 Impact on future borrowing and home equity
A missed payment can stay on your credit record and make future refinancing or home equity borrowing harder or more costly.
6.2 How to prevent missing payments again
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Build a 3-6-month emergency fund.
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Enable automatic payments.
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Review your mortgage regularly especially at renewal.
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Use mortgage relief options early if rates increase sharply.
6.3 Emotional and mental toll & how to address the stress
Financial stress affects mental health. It’s important to seek support, speak to trusted advisors or professionals.
6.4 Example: Homeowner turned repair
Lisa in Kitchener had a near-miss when her variable rate shot up. She set up automatic payments, reduced discretionary spending, and by renewal secured a fixed rate for 5 years. She avoided any missed payments thereafter and kept her credit clean.
FAQ Section
What happens if I miss one mortgage payment in Canada?
Missing one payment usually triggers late fees and may be reported to credit bureaus once it passes 30 days. It does not automatically mean you’ll lose your home, but it starts a risk chain.
Will missing a mortgage payment immediately damage my credit?
Not necessarily immediately. Lenders typically report arrears once 30 days overdue. But it depends on whether your lender reports and how frequently you’ve missed payments. Consistent arrears lead to larger credit damage.
How many mortgage payments can I miss before power of sale in Ontario?
Once you are significantly in arrears (e.g., 90-120 days), the lender may begin power of sale proceedings. Provincial rules and lender policies vary. Want specifics on how long you actually have before a lenders starts foreclosure? Check out our blog about “how many missed payments before foreclosure“
Are there programs for homeowners who can’t make their mortgage payment?
Yes. Federally regulated lenders are expected to offer relief measures when you face financial hardship. You should contact them as soon as you foresee difficulty. Canada.ca
Can I refinance after I’ve missed a mortgage payment?
Yes, but it’s harder. You may need to rebuild credit, show recent on-time payments, and possibly pay higher rates or use a specialist broker such as TurnedAway.ca to access alternative lenders.
Conclusion
Missing a mortgage payment in Canada is serious, but not a final verdict. You still have time and options if you act early. The key steps: acknowledge the missed payment, contact your lender, get a written relief plan, review your budget, and stay current going forward. Your home and credit can be protected with timely action and the right support.
Being proactive about a missed mortgage payment can safeguard your financial future.
Ready to regain control of your finances? Explore tailored solutions designed to meet your needs today through a trusted advisor like TurnedAway.ca. Apply online to get an approval in as little as 24hours or call for a free consultation and get customized relief strategies for your specific situation.
