A missed mortgage payment is not a private matter between you and your bank account: under your mortgage contract it is a default, and the lender has legal remedies that can eventually include a forced sale of the home. The Financial Consumer Agency of Canada (FCAC) is clear that missing a regular payment puts your mortgage in default. It is equally clear that the earlier you talk to your lender, the more options you usually have.
This guide is for homeowners who have missed a payment or expect to. It explains what a default means, what federally regulated lenders are expected to offer, and the steps to take first.
What happens when a payment is missed
Your mortgage agreement sets out what counts as default and what the lender can do. Missing a payment, or breaking another term of the agreement, can lead to late charges and arrears, and if it is not resolved the lender can take legal steps to recover what you owe. The exact process, timelines and costs depend on your contract and on provincial law, so read the default section of your agreement.
A missed payment that is part of a relief arrangement your lender has agreed to is treated differently. FCAC's guideline on mortgages in exceptional circumstances says that when a consumer misses payments covered by the new arrangement, the credit report should not show a late payment or delinquency. A payment you simply skip without an agreement has no such protection.
What federally regulated lenders are expected to do
The FCAC guideline applies to banks and other federally regulated financial institutions, for people with a mortgage on their principal residence who face severe financial stress from circumstances such as high household debt, rapid rate increases or higher living costs. It does not bind provincially regulated credit unions or private lenders, so ask those lenders directly what hardship options they have.
Under the guideline, federally regulated lenders are expected to:
- watch for early signs of financial stress and contact at-risk borrowers proactively;
- offer relief tailored to your situation as soon as feasible;
- explain the full effect before you agree, including your balance, the cost in dollars, the new payment, rate and type, and the effective date, and get your express consent;
- waive prepayment penalties in some cases, such as when you sell your principal residence, and waive internal fees for a limited period, defined as 12 months or less;
- not offer a less advantageous rate at renewal just because you cannot change your mortgage or qualify elsewhere.
Relief options to ask about
FCAC lists several mortgage relief options. Not every lender offers all of them, and most increase the total cost of the mortgage:
- Payment deferral, usually up to four months. You still repay the deferred amount, so your balance or payment may rise.
- Extended amortization, which lowers the payment but can add a large amount of interest. Lenders are expected to keep the extension as short as possible and plan to restore the original amortization.
- Special payment arrangements, such as temporarily reduced payments, with the shortfall recovered over the shortest period you can afford.
- Capitalization, where arrears and related charges are added to the principal, which raises future payments.
- Interest-only payments for a limited period, often used after other changes.
- Skip-a-payment or a credit insurance claim, if your mortgage or optional insurance includes those features.
- Sale by borrower, selling at fair market value, usually within 90 days or less, while you may stay in the home.
FCAC warns that using a home equity line of credit to make mortgage payments is risky, because HELOC rates are usually variable and the lender can change them at any time.
Five steps to take now
- Call your lender before the payment date if you can. If a payment has already been missed, call now.
- Write down your numbers. Income, essential costs, other debts and how long the shortfall may last.
- Ask which relief measures apply and request the disclosures in writing before you consent to anything.
- Compare the long-term cost. Use the amortization schedule calculator to see what a longer amortization or a capitalized balance would cost.
- Get independent help if you need it. A non-profit credit counsellor or an independent mortgage broker can help you weigh options, including at renewal.
Arrears are a growing concern in some markets; see our report on CMHC's outlook for Ontario mortgage arrears.
Sources
- Financial Consumer Agency of Canada, Paying your mortgage when experiencing financial difficulties, 2025-10-15. Accessed 2026-11-14.
- Financial Consumer Agency of Canada, Mortgage relief options, 2025-10-15. Accessed 2026-11-14.
- Financial Consumer Agency of Canada, Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances, 2025-09-25. Accessed 2026-11-14.
This article is general information, not legal or financial advice. Default terms, relief options and enforcement steps depend on your mortgage contract, your lender and provincial law. Speak with your lender, a licensed professional or a lawyer about your situation.
