Missed Mortgage Payments

What Happens If You Miss a Mortgage Payment?

Wondering what happens if you miss a mortgage payment? One late payment rarely costs you your home, but it starts a chain of events worth interrupting early. If you own a home with equity, our team helps homeowners with missed mortgage payments in Ontario catch up and stay put, even after a bank has said no.

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Written by Paul Tsigaris, Mortgage Broker & Owner, TurnedAway.ca · 30+ years, $500M+ funded · Last reviewed: August 2026

If you have already missed a payment, or you can see one coming, this page is written for you. It walks through exactly what happens after a mortgage payment is late, how quickly it escalates, and what you can do at each stage to keep control. If you own a home with equity, you have more options than a bank will tell you about, because those options are based on your equity rather than your recent payment history.

If you do not own your home, or you have very little equity, the honest answer is that the solutions below will not apply, and speaking with a licensed credit counsellor is the better first call. For homeowners with equity, though, falling behind is a problem with a clear path out.

What Happens If You Miss a Mortgage Payment, Stage by Stage

Missing a payment does not flip a switch that puts your home at risk overnight. It sets off a sequence, and knowing the sequence tells you how much time you have and where to step in.

The grace period (the first days)

Most Canadian lenders allow a short grace period, commonly around 15 days, after your due date. Pay within that window and you usually avoid a penalty entirely. The exact terms are set out in your mortgage commitment, so it is worth checking yours.

The late fee and the credit report (around 30 days)

Once the grace period passes, a late fee applies, and at roughly 30 days past due the missed payment is typically reported to the credit bureaus. That report is the moment the miss stops being a private matter between you and your lender and starts affecting your credit score. If you are only a few days past due, our guide on a late mortgage payment in Canada covers exactly where that 30-day line falls and how to stay on the right side of it.

Lender contact and mounting arrears (30 to 90 days)

As the arrears grow, your lender is required to reach out about the overdue amount, and further late fees and interest add to the balance. A second and third missed payment compound both the cost and the damage to your credit. This is still a stage with plenty of room to solve the problem.

The demand letter and power of sale (90 days and beyond)

If the arrears are still unpaid, the lender issues a demand letter requiring you to bring the mortgage current. In Ontario, if you do not, the lender can move to a power of sale to recover what is owed by selling the home. Under the Mortgages Act, a lender generally must wait until you are at least 15 days in default before issuing a formal Notice of Sale, and that notice must give you a redemption period, usually at least 35 days, during which you can pay the arrears and costs and reinstate the mortgage. If you want the thresholds in detail, see how many missed payments it takes before foreclosure.

That redemption window is the last clear opening to fix things with your equity, and it is far easier to act before the legal costs start piling on. For the full picture of how the two processes differ, see our guide on power of sale versus foreclosure in Ontario.

In Ontario, It Is Usually Power of Sale, Not Foreclosure

People often say foreclosure when they mean power of sale, and in Ontario the distinction matters. Foreclosure is a court process in which the lender takes title to the property outright, and it is rare here. The far more common route is power of sale, where the lender sells the home to recover the debt and any costs, then returns any surplus to you. You keep whatever equity is left after the mortgage and enforcement costs are paid.

Because power of sale can move faster than a court foreclosure, the practical takeaway is the same one that runs through this whole page: the earlier you act, the more of your equity you protect. When a lender has already started the process, our guide on how to stop a power of sale lays out what to do.

Why Waiting Costs You More

The single biggest factor in how a missed payment ends is how early you act. The same amount of equity buys very different outcomes depending on timing.

The Financial Consumer Agency of Canada also recommends contacting your lender as soon as you know you may miss a payment. You can read its guidance on managing mortgage difficulty at the FCAC.

Your Options When You Have Fallen Behind

If you have equity in your home, the most reliable way to catch up is to put that equity to work, as long as total borrowing stays within 80% of your home's value. That cap is there to protect you, so you always keep an equity cushion. Here are the main routes, each explained in full on our missed mortgage payments money page.

Stop it and stay in your home

A home equity loan or a second mortgage can clear the arrears in a single lump sum and bring your mortgage current, which halts a lender's enforcement. A refinance can go a step further by resetting your terms and lowering the monthly payment, and a home equity line of credit gives you funds to draw on as needed.

Breathing room with no monthly payments

If a layoff, illness, or other temporary gap has left you with little or no income, the interest on an equity loan can be prepaid for a period, so there are no monthly payments while you get back on your feet. It is a short-term bridge with a clear exit plan, not a long-term fix, and we only arrange it where there is a realistic way out. If your lender is still willing to work with you, it is also worth asking whether you can defer a mortgage payment while your account is in good standing.

Sell on your own terms

If keeping the home is not the right call, selling it yourself at full market value almost always beats a rushed, lender-driven sale. You keep control of the timeline, the price, and your privacy, and you protect the equity a forced sale would eat into.

If you are 55 or older

Homeowners aged 55 and up may also qualify for a reverse mortgage, which works differently from the options above and carries no monthly payments. It is worth reviewing alongside the others to see which fits best. Not sure how much equity you have to work with? Our home equity calculator gives you a quick estimate.

Missed Mortgage Payment FAQs

What happens if you miss a mortgage payment?

After a short grace period, usually around 15 days, a late fee applies, and at roughly 30 days past due the missed payment is reported to the credit bureaus. If the arrears go unaddressed, they can escalate to a demand letter and, in Ontario, eventually a power of sale. Acting early keeps the cheapest and best options open.

How long is the grace period on a mortgage payment?

Most Canadian lenders offer a grace period of around 15 days after the due date, during which you can pay without a penalty. The exact number of days is set out in your mortgage agreement, so check your own terms to be sure.

Does one missed mortgage payment hurt your credit?

A single payment paid within the grace period usually does not. Once you pass about 30 days past due, the miss is typically reported to the credit bureaus and can lower your score. In Canada, a reported missed payment generally stays on your credit file for six to seven years from the date it was reported.

How many missed payments before a power of sale in Ontario?

There is no single fixed number, but lenders often move toward enforcement after around 90 days of arrears. In Ontario, a lender generally must wait until you are at least 15 days in default before issuing a Notice of Sale, and that notice gives a redemption period of at least 35 days to pay the arrears and reinstate the mortgage.

Can I catch up on missed mortgage payments with home equity?

Often yes. If you have equity, a home equity loan, a second mortgage, a refinance, or a HELOC can clear the arrears in a lump sum and bring the mortgage current, as long as total borrowing stays within 80% of your home's value. Approval is based on your equity rather than your recent payment history.

What is the difference between power of sale and foreclosure?

In a power of sale, the lender sells the home to recover the debt and returns any surplus to you. In a foreclosure, the lender takes title to the property through the courts. In Ontario, power of sale is far more common, and it can move faster, which is why early action matters.

Can I get help if I have no income right now?

Yes. Because approval is based on equity, income is not the deciding factor. For homeowners with little or no income, the interest can be prepaid into the loan for a period, so there are no monthly payments while you stabilise, provided there is a realistic exit plan.