Behind on property taxes? The municipality outranks your bank — act before the tax sale.
Unpaid property taxes are a super-priority lien that sits ahead of your mortgage. We refinance against your equity to clear the arrears, stop the tax-sale clock, and protect the home.
Equity-based approvalStops the tax salePays the municipality directClears the lienB-lender + private100% confidential
Most homeowners don’t realize property taxes quietly outrank their mortgage. When you fall behind, the municipality adds penalty and interest every single month — in Ontario that’s typically 1.25% per month, about 15% a year — and once you’re two years in arrears it can register a tax-arrears certificate. From there you have roughly one year to redeem before the municipality can sell your home at a tax sale to recover what it’s owed, wiping out your equity in the process. A-lenders won’t refinance a property with tax arrears on it. But if you have equity, we can pay the municipality out, clear the lien, and stop the sale before the clock runs out.
What you get
Why Canadians choose Mortgage Squad Advisors.
Equity-based qualifying — approval driven by your home’s value, not just income or credit
Pays the municipality directly at funding so the arrears are cleared in one move
Stops the tax-arrears certificate and tax-sale process before you lose the home
Rolls in penalty and accrued interest so you exit fully current, not half-caught-up
Consolidate other debt (CRA, judgments, cards) into the same refinance where it helps
Up to 80% LTV at alt-A lenders; 65-75% on private depending on property and location
Private capital can fund in days when a tax-sale date is approaching
Existing first mortgage can stay in place — second-mortgage payout where it’s cheaper
Plan to refinance back to A-lender pricing once the lien is gone and credit stabilizes
All lender + broker + legal fees disclosed in writing before you commit
Instant check · no credit pull
Could consolidating cut your monthly payments?
Roll high-interest debt into your mortgage at a far lower rate — see the monthly difference.
$60,000
Debt you could consolidate (to 80% LTV)
$1,800/mo
Now (min payments ~3%/mo)
$387/mo
Rolled into mortgage
$1,413/mo
Estimated monthly cash-flow saving
Estimates only — a licensed advisor confirms your file. FSRA #13737.
Send us the property address, the total owing on your tax account (the municipality’s statement shows arrears plus penalty and interest), and whether a tax-arrears certificate has been registered. We estimate available equity and map your options within 24 hours. If a sale date is set, tell us immediately so we can prioritize.
2
Match the capital
Clean credit with equity → alt-A second or full refinance at the lowest rate. Tight timeline or a registered certificate → private capital that funds in days. We pick the cheapest path that closes before the redemption window expires and covers the full arrears, penalty, and interest.
3
Pay out + plan the exit
Your lawyer pays the municipality directly from funding and confirms the tax account is current and the certificate is discharged. We set a refinance trigger — typically 12-24 months — to move you off the alt rate back to A-lender pricing once your file stabilizes.
What actually happens when property taxes go unpaid?
Property taxes don’t behave like a normal debt. The moment they go unpaid, the municipality holds a statutory lien on your home that ranks ahead of every mortgage on title — including your bank’s first charge. Nobody has to register anything for that priority to exist; it’s automatic under provincial law. Each month the balance grows as penalty and interest compound, and in most Ontario municipalities that runs around 1.25% a month.
The process is deliberate, not instant. After a property has sat in arrears for a set period — roughly two years in Ontario — the municipality can register a tax-arrears certificate against your title. That certificate starts a formal redemption window, commonly about a year, during which you can pay everything owing and stop the process cold. Timelines and terminology vary by province and even by municipality, but the principle is the same everywhere: ignore it long enough and the municipality can sell the home out from under you to recover what it’s owed.
Why do tax arrears have to be cleared so quickly?
Two clocks are running against you at once. The first is cost: penalty and interest near 15% a year mean the balance you owe today is meaningfully smaller than the balance you’ll owe in six months, and that erosion comes straight out of your equity. The second is the redemption deadline — once a tax-arrears certificate is registered, the calendar to a tax sale is finite and it does not pause because you’re arranging financing.
The fix is direct. We refinance against the equity in your home — or place a second mortgage behind your existing first — and your lawyer pays the municipality in full at funding. The arrears, penalty, and accrued interest are wiped to zero in a single move, the certificate is discharged, and the tax-sale process stops. Because qualifying is driven by your home’s value rather than a perfect income or credit file, this works even when a bank has already turned you away.
Which lenders will refinance a home with tax arrears?
There’s a clear ladder, and knowing where you sit on it saves time you may not have. A-lenders — the big banks — sit at the top with the cheapest pricing, but they will not advance a dollar against a property that has tax arrears registered against it. The taxes must already be clear, which is exactly the catch-22 that traps most homeowners.
B-lenders and alt-A lenders sit in the middle. They’ll refinance specifically to pay the arrears out, rolling the full balance into the new mortgage at a modest premium over bank pricing. Private lenders sit at the bottom of the ladder and the top of the speed chart: they fund on equity alone, will lend even with a certificate already registered, and close in days. With 100+ lenders across all three tiers — including private capital — we place you on the cheapest rung that can actually fund before your deadline, not just the first lender who says yes.
Can a private mortgage fund fast enough to stop a tax sale?
Yes — speed is the entire reason private capital exists for files like this. Once we have a current appraisal and your lawyer is instructed, a private mortgage can fund in roughly 3-7 business days. That’s fast enough to redeem a property with a tax-sale date already on the calendar, and we’ve closed files with very little runway to spare.
The mechanics are clean. Your existing first mortgage can stay exactly where it is; the private money slots in behind it as a second, or replaces it entirely if that’s cheaper overall. At closing, your lawyer pays the municipality directly, confirms the tax account reads zero, and ensures any tax-arrears certificate is discharged from title. The municipality is paid, the lien is gone, your first lender stays current and content. The one thing that changes the math is time — the more days we have before the redemption window closes, the cheaper the capital we can source for you.
What’s the plan after the arrears are paid?
Clearing the arrears is the rescue, not the destination. An alt or private mortgage is the right tool to stop the tax sale, but it’s priced higher than a bank, and the point is never to stay there. The plan is three steps: clear the lien and stabilize the file, hold the new mortgage while your credit recovers and the title shows clean, then refinance back to A-lender pricing — typically within 12-24 months.
We set that exit up front, with a refinance trigger built into the file so the move back to cheaper pricing isn’t left to chance. Where it helps, we fold other pressure — CRA arrears, a judgment, high-interest cards — into the same payout so you exit with one manageable payment instead of several. With FSRA #13737, every lender, broker, and legal fee disclosed in writing before you commit, and service in 50+ languages, the goal is simple: you keep the home, you keep the equity, and you walk out on a path back to normal pricing.
FAQ
Common questions, answered.
Don’t see yours? Ask Maya — instant answer, any time.
Why do property taxes rank ahead of my mortgage?
By statute, municipal property taxes are a super-priority lien on the property — they sit ahead of every mortgage, registered or not. That’s why your mortgage lender cares so much about tax arrears: if the municipality forces a tax sale, the taxes get paid first, ahead of the bank. It’s also why A-lenders refuse to refinance a property with arrears until they’re cleared.
How long do I have before the municipality can sell my home?
It varies by province, but in Ontario the municipality can register a tax-arrears certificate once the property has been in arrears for roughly two years, and you then have about one year to redeem (pay everything owing) before a tax sale can proceed. Other provinces have similar but not identical timelines. The earlier you act, the cheaper and less stressful the fix — don’t wait for the certificate.
Can I get a mortgage if I already have property tax arrears?
Not from a bank — A-lenders require taxes to be current. But alt-A and private lenders will refinance specifically to pay the arrears out. The new mortgage funds, your lawyer pays the municipality, the tax account is brought current, and any certificate is discharged. Equity is the key: if there’s room in the home, there’s almost always a solution.
How fast can you fund if a tax-sale date is set?
Private files can fund in as little as 3-7 business days once we have an appraisal and the lawyer is instructed. If your redemption window is closing, tell us the exact date — we’ve redeemed properties with little time to spare, but more runway always means a cheaper solution.
How much equity do I need?
Generally the new mortgage (existing balance + arrears + penalty + costs) should stay under 75-80% of value for alt-A, or 65-75% for private. Example: a $650k home with a $380k first mortgage has roughly $100-140k of accessible room — more than enough to clear most arrears and consolidate other debt at the same time.
Will the penalty and interest be included?
Yes. We size the payout to cover the full balance the municipality shows — base arrears plus accumulated penalty and interest — so you come out fully current rather than partially caught up and immediately falling behind again. Catching up halfway is the most common mistake; we make sure the account hits zero.
Can I roll in other debts too?
Often the smartest move. If you have CRA arrears, a judgment, or high-interest credit cards alongside the property taxes, we can consolidate everything into one payout so you exit with a single manageable payment. We model the blended cost so you see the real number before deciding.
What does this cost?
Alt-A seconds run roughly +100-200 bps over A-lender pricing; private sits higher at +200-500 bps plus a lender and broker fee. Compared with 15%-a-year municipal penalty interest — and the catastrophic loss of equity in a tax sale — the alt premium is almost always the cheaper path, and it’s temporary: the goal is to refinance back to A pricing within 12-24 months.
Will paying the arrears remove the lien from my property?
Yes. Once the municipality is paid in full, the tax account is current and any registered tax-arrears certificate is discharged, so the lien clears. With the title clean and your credit stabilizing, A-lender pricing typically becomes available again over the following 12-24 months.
Is this confidential?
Completely. Your conversations with us stay private, and the only parties to the payout are your lawyer, the lender, and the municipality being paid. We handle arrears and tax-sale files regularly — there’s no judgment from us, only a plan to keep you in your home.
