If you’re reading this, you probably searched “mortgage in arrears what to do” and landed here past the point of denial. There are proven ways to catch up, and in many cases you can use the equity you’ve already built to do it without selling.

I’m Shawn Allen, principal broker at Matrix Mortgage Global (Lic# 11108) in Toronto. You can book a call with me directly here: https://calendar.app.google/wWmAFX82Pbu5YEMk8.

What Does It Mean When Your Mortgage Is in Arrears?

Your mortgage is in arrears the moment you miss a scheduled payment. The real trouble builds later, and knowing the stages helps you act before the file escalates.

You’re not alone in this, and the trend line is worth knowing. The national rate for mortgages 90+ days past due was 0.25% in Q2 2026, up two basis points from the previous quarter and up from 0.21% at the end of 2024, according to the CMHC Residential Mortgage Industry Report published August 27, 2026, via Equifax Canada. Low in absolute terms, and climbing. Neither fact changes your situation. Both should tell you that lenders are handling more of these files than they were two years ago, and that the homeowners who act early are the ones who keep their options.

The timeline usually runs something like this:

• Day 1-14: courtesy call or email.
• Day 15-30: late fees; credit score drops.
• Day 30-60: formal Notice of Default possible.
• Day 60-90: legal process may begin.
• Day 90+: file moves to legal; home at risk.

Read that timeline again and you’ll spot the pattern: every stage costs you options. Acting at day 20 versus day 90 is often the difference between a phone call and a court filing.

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

People rarely fall behind because they “forgot” to pay. It’s almost always a life event or a financial shock that outruns the budget. And lately the numbers have gotten heavier: the average Canadian mortgage payment is about $1,852 a month, up 3.81% from a year earlier, while total Canadian mortgage debt sits near $2.406 trillion, up 4.79% (CMHC/Equifax data, Q4 2025 versus Q4 2024). Understanding why you’re behind matters because the fix has to match the cause. The reasons I see most often at Matrix Mortgage Global:

Job Loss or Reduced Income

A lost job is the classic trigger. When the main income stops, the mortgage is usually the first large bill to slip.

High-Interest Debt Overwhelm

Credit cards, car loans, and lines of credit charging 19% to 29% can quietly eat a paycheque. When the minimums consume everything left after rent and groceries, something gives, and too often it’s the mortgage payment that gets pushed to “next week.”

Unexpected Expenses or Emergencies

A roof that needs replacing, a furnace that dies in January, a medical bill, a family crisis.

Business Cash Flow Issues (Self-Employed)

Self-employed income is rarely smooth. One slow quarter, one client who pays 90 days late, and the cash that was meant for the mortgage is sitting in receivables. It isn’t a spending problem. It’s a timing problem.

Mortgage Renewal Payment Shock

This is the one I’m hearing most in 2026. Roughly 60% of outstanding Canadian mortgages come up for renewal before the end of 2026, and renewing borrowers are stepping up to payments that look nothing like their old ones. The Bank of Canada held its overnight rate at 2.25% on September 2, 2026, the seventh straight hold, and prime sits at 4.45%. Those are normal rates. The problem is that many households signed at rates that no longer exist.

A borrower renewing a fixed term around April 2026 is looking at payments roughly 20-24% higher, about $622 more per month on the average fixed renewal, according to Ratehub.ca. For someone with a 5-year variable mortgage carrying fixed payments, the jump could run up to about 40%, per Desjardins, as reported by Yahoo Finance Canada. A budget built around the old payment doesn’t automatically stretch to the new one, and that’s how otherwise solid homeowners end up in arrears.

The reason matters when it comes to choosing the fix, but the first step is the same either way: reach out, and make a plan.

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

Call your lender the same week you miss the payment. Under the Financial Consumer Agency of Canada (FCAC) guidelines, lenders must offer procedures for borrowers in difficulty.

Walk into that conversation prepared. Here’s the sequence I give clients:

• Step 1: Call your lender; explain the situation.
• Step 2: Gather income, bank, and debt documents.
• Step 3: Talk to a broker who sees the whole picture.
• Step 4: Cut non-essential spending.
• Step 5: Avoid new high-interest debt.

Keep in mind that your lender prefers a repayment plan over a foreclosure. A borrower who shows up with a plan is far easier to work with than one who disappears.

What Options Are Available to Get Out of Mortgage Arrears?

After that first call, you usually have several paths forward. Which one fits depends on how much equity you have, how your income looks, and how deep into arrears you’ve fallen.

Option 1: Lender Payment Deferral or Refinance

If you’re only one or two payments behind, your lender may agree to add the missed amounts to the principal and stretch the amortization. In my experience it’s the fastest route out of arrears for someone with minor delinquency and equity.

Option 2: Refinance with a New Lender

Your current lender says no, another one might say yes. In my experience it’s the fastest route out of arrears for someone with equity and a workable debt ratio.

Option 3: Use Home Equity to Clear Arrears and Debt

This is where our flagship program comes in. If you’ve built equity in the home, you can use it to solve the arrears problem instead of selling. The H.E.L.P. (Home Equity Loan Program) lets you draw on that equity to:

• bring the mortgage fully current
• consolidate high-interest credit card and loan balances
• lower your overall monthly payment
• rebuild your cash flow and give your credit score room to recover

The effect is straightforward: the mortgage is current again, the high-interest debt is gone, and you’re left with one payment you can actually manage.

Option 4: Sell the Property (Last Resort)

When none of the above fits, a voluntary sale beats a forced one. It’s a reset, not a failure.

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

In Ontario, power of sale can start around 90 days behind. The legal process takes 6-12 months — time to act.

That window is narrower than it used to be. Ontario’s arrears rate ran about 0.27% in Q1 2026, up 35% from a year earlier, and CMHC expects arrears to keep climbing moderately through 2026 with Toronto among the markets most at risk (CMHC via Equifax; Wealth Professional, May 2026). Power of sale listings in Ontario are up about 59% year over year, according to REMAX Plus City (2026). Lenders are moving files faster because more files are moving.

None of that means you’re out of time. It means the time you have is more valuable. Every week you stay silent, the lenders further down the list become less willing to help.

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

A lot of homeowners assume that once they’re in arrears, no lender will look at them. You won’t qualify for prime rates, but alternative and private lenders underwrite against equity, not just payment history.

The lender types break down like this:

• Prime lenders (the big banks): they generally want 12-24 months of clean payment history, so an active arrears file is usually a decline.
• Alternative lenders (credit unions, monoline lenders): they’ll consider you with strong equity and a credible recovery plan. Rates run higher, typically 6-9%, but this is a bridge, not a destination.
• Private lenders: the most flexible of the three. They underwrite against the equity in your home more than your credit history, and they can fund fast, sometimes within 5-7 days, which matters when a power of sale deadline is bearing down. Rates are higher again, roughly 8-12%.

At Matrix Mortgage Global we place loans across that whole spectrum. A typical plan looks like this: get you current with an alternative or private lender now, then move you back to a prime lender once your history is clean, usually 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 matters more than perfection. H.E.L.P. exists for homeowners who need an equity-based fix and need it now.

The Problem

You’re 45-60 days behind. The Notice of Default has landed. High-interest debt is eating your income, and every option you can think of seems to have a wall in front of it.

The H.E.L.P. Solution

H.E.L.P. lets you tap the equity you’ve already built, without selling, to cover:

• the full arrears amount, which brings the mortgage current immediately
• consolidation of credit cards, car loans, and other high-interest debt
• a cash reserve so the next emergency doesn’t start this cycle over

The Outcome

Mortgage current. It doesn’t fix everything overnight, but it puts you back in control of the budget.

Calling H.E.L.P. a “second mortgage” undersells it. It’s an equity-based refinance built for a specific situation: arrears plus debt that’s strangling your cash flow. If that’s where you are, it’s worth one conversation.

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

I understand the urge to put the statements in a drawer and hope. Here’s what actually happens when you do:

• Your credit takes a long hit. A foreclosure or power of sale stays on your credit report for 6-7 years, and while it’s there, mortgages, car loans, even basic credit cards come at punishing rates, if they come at all.
• You pay the legal costs. The lender’s lawyers bill you, typically $5,000-$15,000 on top of what you already owe.
• A deficiency can follow you. If the home sells for less than the debt, you owe the shortfall, and the lender can pursue you for it.
• It weighs on more than your finances. The stress of possibly losing your home strains marriages, sleep, and health. That part doesn’t show on a credit report, but it’s often the most expensive part.

None of that is inevitable. Every one of those outcomes is avoidable while you still have equity and options, and you still do.

Most Canadian lenders start the legal process (power of sale or foreclosure) once you’re about 90 days behind.

Yes, but not with a prime lender. Alternative and private lenders focus on your home’s equity rather than your payment history, and a broker can match you with one willing to refinance, bring the mortgage current, and consolidate your debts.

Power of sale is the common route in Ontario. Power of sale gives homeowners more protection and more time, which is why it’s used more often.

Yes. FCAC rules require lenders to have procedures for dealing with borrowers in financial difficulty. If you call early with a clear plan, most will offer deferrals, refinancing, or other relief options rather than push the file toward legal.

Equity gives you cash without a sale. A home equity solution like H.E.L.P. pays the arrears, retires high-interest debt, and leaves you with one manageable payment, and you keep the house.

If you have no equity, your options narrow but don’t disappear. Acting early and getting professional advice keeps more of those doors open.

Take Control of Your Mortgage Situation Today

Falling into arrears isn’t a life sentence. It’s a financial setback, and setbacks respond well to plans and deadlines. What they don’t respond to is silence.

At Matrix Mortgage Global, Canada’s Mortgage Company (Lic# 11108), we’ve built our practice around helping Ontario homeowners through exactly this situation. Our flagship H.E.L.P. Home Equity Loan Program has helped homeowners across the province clear arrears, consolidate debt, and keep their homes.

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

• 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 probably the largest asset you own. Let’s keep it that way. The sooner you call, the more options we have to work with.