If you’re reading this, you’re likely facing one of the most stressful situations a homeowner can experience: your mortgage is in arrears, and you’re not sure what to do next. The fear of losing your home can feel paralyzing, but here’s the critical truth — the worst thing you can do is nothing. In Canada, lenders don’t want your house; they want their payments. There are proven steps to recover, and in many cases, homeowners can use the equity they’ve already built to get back on track without selling.

At Matrix Mortgage Global (Canada’s Mortgage Company, Lic# 11108), we’ve helped hundreds of Ontario homeowners navigate mortgage arrears. Whether you’ve missed one payment or several, this guide breaks down your options, explains how the process works, and shows you a clear path forward. Book a call with Shawn Allen today for a confidential, no-pressure assessment of your situation — https://calendar.app.google/wWmAFX82Pbu5YEMk8.

What Does It Mean When Your Mortgage Is in Arrears?

Your mortgage is considered “in arrears” the moment you miss a scheduled payment. In Canada, most lenders provide a grace period, but by the time you’re 30 days past due, your mortgage is officially in default status. According to the Canadian Bankers Association, the national mortgage arrears rate (loans 90+ days past due) remained below 0.2% in 2024, but for the homeowners who experience it, the impact is severe.

Here is what typically happens when you fall into arrears:

• Day 1-14: You receive a courtesy call or email from your lender.
• Day 15-30: Late fees are applied, and your credit score takes a hit (a missed payment can drop your score by 60-110 points, according to Equifax data).
• Day 30-60: Your lender may send a formal Notice of Default. This is a critical window for action.
• Day 60-90: The lender may begin the legal process to power of sale or foreclosure.
• Day 90+: Your file may be transferred to the lender’s legal department, and the risk of losing your home increases significantly.

Understanding this timeline is essential because the earlier you act, the more options you have. Waiting until day 90 severely limits your alternatives.

Why Do Homeowners Fall Behind on Mortgage Payments in Canada?: Mortgage In Arrears What To Do

Falling into arrears rarely happens because someone “forgot” to pay. It typically results from a significant life event or financial shock. Understanding the root cause is the first step toward solving the problem. The most common reasons we see at Matrix Mortgage Global include:

Job Loss or Reduced Income

According to Statistics Canada, even in a strong labour market, over 500,000 Canadians experience job loss each quarter. The sudden loss of a primary income stream makes it nearly impossible to maintain mortgage payments without a financial buffer.

High-Interest Debt Overwhelm

Many homeowners carry credit card debt, car loans, and lines of credit with interest rates between 19% and 29%. When monthly minimum payments on these debts consume your entire paycheque, something has to give — and often, it’s the mortgage.

Unexpected Expenses or Emergencies

A major home repair (new roof, furnace, foundation), a medical emergency, or a family crisis can drain savings accounts and disrupt cash flow for months. The Bank of Canada reports that nearly half of Canadian households have less than $200 in liquid savings, leaving zero cushion for unexpected costs.

Business Cash Flow Issues (Self-Employed)

For self-employed homeowners, income is rarely steady. A slow quarter or a late-paying client can create a cash crunch that pushes mortgage payments to the back burner.

Variable-Rate Mortgage Payment Shock

Homeowners with variable-rate mortgages saw their payments increase dramatically during the Bank of Canada’s rate hike cycle from 2022-2024. Some payments rose by 40-60% compared to their original terms, pushing budgets past the breaking point.

Regardless of your reason, the solution starts with the same first step: proactive communication and a strategic plan.

What Should You Do First If You Miss a Mortgage Payment?

The absolute first thing you should do is contact your lender or mortgage broker immediately. Do not avoid their calls. According to the Financial Consumer Agency of Canada (FCAC), lenders are required to work with borrowers who are experiencing financial difficulty, but they can only help if you communicate with them.

Here is your immediate action plan:

• Step 1: Contact Your Lender. Call the customer service number on your statement and explain your situation honestly. Ask about “payment deferral” or “special payment arrangements.”
• Step 2: Gather Your Financial Documents. Pull together your income statements, bank account details, and a list of all debts. You’ll need this to demonstrate your financial picture.
• Step 3: Contact a Mortgage Broker. At Matrix Mortgage Global, we can assess your entire situation and identify solutions your lender might not offer. This consultation is free and confidential.
• Step 4: Cut Non-Essential Spending. Free up as much cash as possible while you work out a solution. Every dollar counts.
• Step 5: Do Not Take on New Debt. Avoid payday loans or high-interest credit advances — they will only make your situation worse.

Remember: your lender would rather work out a repayment plan than initiate a foreclosure, which costs them time and legal fees. According to CMHC data, the average foreclosure process takes 6-12 months and costs lenders thousands of dollars — they have no interest in going down that path if you’re cooperative.

What Options Are Available to Get Out of Mortgage Arrears?

Once you’ve made that first call, you have several potential paths forward. The right solution depends on your equity position, your income situation, and how far into arrears you are.

Option 1: Lender Payment Deferral or Refinance

If your arrears are minor (1-2 payments), your lender may agree to add the missed payments to your principal balance and re-amortize your loan. This spreads the missed payments over the remaining term, reducing your immediate burden. However, this option typically requires you to demonstrate that your income has recovered or will recover soon.

Option 2: Refinance with a New Lender

If your current lender won’t help, another lender might. This is where a mortgage broker is invaluable. A new lender may be willing to refinance your mortgage, consolidating your arrears and other debts into a single, manageable payment. This is often the fastest way to reset your financial situation.

Option 3: Use Home Equity to Clear Arrears and Debt

This is where Matrix Mortgage Global’s flagship program comes in. If you’ve built up equity in your home, you can leverage it to solve your arrears problem. H.E.L.P. — Home Equity Loan Program allows homeowners to access the equity they’ve already built to:

• Bring your mortgage fully current
• Consolidate high-interest credit card and loan debt
• Reduce your overall monthly payments
• Improve your cash flow and credit score trajectory

The result? You’re current on your mortgage, your credit score begins to recover, and your monthly cash flow improves dramatically — all without selling your home.

Option 4: Sell the Property (Last Resort)

How Long Can You Be in Arrears Before Foreclosure in Canada?

The key takeaway: the clock is ticking, but you have time if you act now. Waiting only narrows your options.

Can You Get a Mortgage Refinance with Arrears on Your Credit?

Many homeowners assume that once they’re in arrears, no lender will touch them. That’s not entirely true. While you won’t qualify for prime rates, there are alternative and private lenders in Canada who specialize in helping homeowners in arrears — especially when there’s significant equity in the property.

Here’s what you need to know:

• Prime lenders (Big Banks): Generally require 12-24 months of perfect payment history. If you’re in arrears, they will likely decline your application.
• Alternative lenders (Credit Unions, Monoline Lenders): May consider your application if you have strong equity and a clear plan to recover. You’ll pay a slightly higher rate (typically 6-9% in 2024/2025), but it’s a temporary fix.
• Private lenders: These are the most flexible. They focus primarily on the equity in your home, not your credit score. Rates are higher (8-12%), but they can fund quickly — sometimes in as little as 5-7 days — which is critical when you’re facing a power of sale deadline.

At Matrix Mortgage Global, we have access to lenders across the entire spectrum. We can structure a solution that gets you current immediately, then transitions you back to a prime lender once your credit recovers — typically within 12-18 months.

How Can H.E.L.P. (Home Equity Loan Program) Get You Out of Arrears Fast?

When you’re in arrears, speed is everything. The H.E.L.P. program is designed specifically for homeowners like you who need a fast, equity-based solution to stabilize their finances. Here’s how it works:

The Problem

You’re 45-60 days behind on your mortgage. Your lender has sent a Notice of Default. You have high-interest debt that’s consuming your income. You feel trapped.

The H.E.L.P. Solution

H.E.L.P. allows you to access a portion of your home’s equity — not by selling, but by leveraging what you’ve already built. This funds:

• Immediate payment of all arrears to bring your mortgage current
• Consolidation of credit cards, car loans, and other high-interest debts
• A cash reserve for future emergencies

The Outcome

You’re current on your mortgage. Your credit score begins to repair. Your monthly payments are lower because you’ve eliminated high-interest debt. You have breathing room in your budget. You’ve kept your home. You’re in control again.

This is not a “second mortgage” in the traditional sense — it’s a strategic home equity solution designed to rescue your financial situation and put you back in the driver’s seat.

What Happens If You Do Nothing? The Consequences of Ignoring Arrears

We understand the urge to bury your head in the sand. But the consequences of doing nothing are severe and long-lasting:

• Credit Score Destruction: A foreclosure or power of sale will remain on your credit report for 6-7 years, making it nearly impossible to get a mortgage, car loan, or even a credit card at a reasonable rate.
• Legal Costs: You will be responsible for the lender’s legal fees, which can add $5,000-$15,000 to your debt.
• Deficiency Judgment: If your home sells for less than what you owe, you’re on the hook for the difference. The lender can pursue you for this amount.
• Emotional Toll: The stress of potential homelessness and financial ruin takes a severe toll on mental health and family relationships.

None of these outcomes are inevitable. Every single one can be avoided by taking action today.

Frequently Asked Questions

How many payments can you miss before foreclosure in Canada?

Most Canadian lenders will begin the legal process (power of sale or foreclosure) after 90 days of missed payments, although some may wait longer if you’re in communication. However, the legal process itself takes 6-12 months, giving you time to resolve the arrears if you act quickly.

Can I refinance my mortgage if I’m in arrears?

What is the difference between a power of sale and foreclosure in Ontario?

Will my lender work with me if I call them?

Yes. According to the Financial Consumer Agency of Canada (FCAC), lenders are required to have procedures for dealing with borrowers in financial difficulty. If you contact them proactively and provide a clear plan, they are often willing to offer payment deferrals, refinancing, or other relief options.

How does using home equity help with mortgage arrears?

What if I have no equity in my home and I’m in arrears?

If you have no equity, your options are more limited. You may need to negotiate a repayment plan with your lender, sell the property voluntarily, or consider a consumer proposal. Acting early and seeking professional advice is critical in this scenario.

Take Control of Your Mortgage Situation Today

Falling into mortgage arrears is not a life sentence. It’s a financial setback — and setbacks can be overcome with the right strategy and the right team in your corner. The worst thing you can do is wait and hope the problem disappears. It won’t.

At Matrix Mortgage Global (Canada’s Mortgage Company, Lic# 11108), we specialize in helping Ontario homeowners navigate exactly this situation. Our flagship H.E.L.P. — Home Equity Loan Program has helped countless families clear arrears, consolidate debt, and regain financial control without selling their homes.

Ready to get out of arrears and protect your home? Book your free, confidential consultation with Shawn Allen today:

• Book Online: https://calendar.app.google/wWmAFX82Pbu5YEMk8
• Call: 855-55-FUNDS (38637)
• Email: mortgage@mmgb.ca
• Office: N103-455 Front St E, Toronto, ON M5A 0G2

Your home is your most valuable asset. Let us help you keep it. The sooner you act, the more options you have.