What to Do If You Miss a Mortgage Payment in Canada

Missing a mortgage payment is one of the most stressful things a homeowner can face, but it happens — and the outcome depends far more on what you do in the first few days than on the missed payment itself. Lenders have a range of tools to help borrowers in genuine hardship, but most of those tools only work before the file enters their collections process.

The short answer

Call your lender the moment you know you will miss a payment — before it is actually missed. Most lenders offer a deferral or payment arrangement that does not trigger power of sale. If you have already missed payments, a mortgage broker can access alternative lenders who will refinance while you catch up.

What happens after you miss a payment

On the day the payment is missed your lender will typically charge a non-sufficient funds (NSF) fee and mark the payment as outstanding. After 30 days the missed payment may appear on your credit report. After 90 days most lenders issue a formal demand letter. Power of sale or foreclosure proceedings typically cannot begin until a mortgage is in default for three to six months under the mortgage terms, but the legal costs start accumulating from the first demand letter.

Step 1: Call before the payment is missed

If you can see the problem coming — a job loss, an unexpected expense, a period of reduced income — call your lender's mortgage hardship line, not the general customer service number. Ask specifically about:

• Payment deferral — many lenders allow one or two monthly payments to be moved to the end of the mortgage term, penalty-free, once every 12 months.
• Reduced payment arrangements — interest-only or reduced payments for a defined period.
• Amortization extension — temporarily extending the amortization to reduce the payment amount.

Document every conversation: the date, the agent's name, and what was agreed. Follow up any verbal arrangement with a request for written confirmation.

Step 2: If you have already missed payments

Contact your lender immediately, even if multiple payments are missed. Lenders almost always prefer a negotiated arrangement to the cost and time of power of sale. At this stage also speak with a mortgage broker — alternative lenders (B-lenders and private lenders) can often refinance your mortgage while you are in arrears, particularly if you have equity in the property. The goal is to get current, then refinance to a better rate once your situation stabilises.

Step 3: Know your legal position

In Ontario and most of Canada, lenders must follow a specific legal process before they can take possession of your property — and that process takes months. You have time to act, but use that time, not ignore it. If you receive a formal demand letter or notice, that is the moment to speak to a mortgage broker and possibly a lawyer. See how to stop a foreclosure in Canada.

Frequently asked questions

Will one missed mortgage payment ruin my credit?

A single missed payment reported after 30 days will affect your score, but not catastrophically. The damage compounds with each subsequent missed payment and with collections or legal action. Calling your lender before it is reported gives you the best chance of avoiding a credit impact.

Can I refinance if I have missed mortgage payments?

Yes, through alternative and private lenders who can work with borrowers in arrears — particularly if you have home equity. A mortgage broker will assess which lenders will look at your file and what terms you can expect.

What is power of sale in Canada?

Power of sale is the legal process by which a lender can sell your property to recover the mortgage debt. In Ontario it is the most common remedy and requires the lender to give you formal written notice and a redemption period. A broker can often help you refinance before the process completes.