Last updated: August 6, 2026

Can You Still Get a Loan If You’re Already Behind on Your Mortgage in Ontario?

Yes — homeowners in arrears get approved in Ontario every week, because equity lenders approve on what your home is worth, not on the payments you’ve missed. But Ontario is not a province where you can sit on the decision. A lender can issue a Notice of Sale just 15 days after default, and from that notice you may have as little as 35 days before enforcement moves. The loan that fixes this is routine; the deadline is the hard part.

That is the honest difference between being behind on a mortgage in Ontario and almost anywhere else in Canada: the fix is available, and the clock is genuinely short.

Why is the bank saying no right now?

Because banks underwrite payment history, and yours is the one thing currently broken. The decline is automatic — it isn’t a prediction about your future, and it isn’t the market’s answer. Ontario has the deepest alternative lending market in the country: B lenders who price bruised files reasonably, and private lenders who approve on equity alone and can fund inside two weeks.

The question that decides your file is not “how many payments have you missed?” It’s “what is the home worth against what’s owing?” In the GTA, where the average June 2026 sale was $1,058,658, even a homeowner six months behind often has more than enough equity to solve the entire problem.

What are your real options, stage by stage?

The mechanics are the same at every stage: the new loan pays the arrears and legal costs at closing through your lawyer, the default is cured, and the enforcement stops. Under Ontario’s Mortgages Act you have the right to redeem — pay what’s owing and end the process — right up until the property is sold. Here’s the full Ontario power of sale timeline, day by day.

On a deadline? Send us your mortgage balance, your best guess at the home’s value, and what the letter on your counter says. We’ll tell you the same day whether the numbers work — before any credit check. 1-866-329-8801.

What does this look like with real numbers?

A semi in Mississauga worth $920,000. First mortgage: $610,000. Five missed payments after a job loss — $19,500 in arrears, plus $7,000 in the lender’s legal costs after a Notice of Sale.

• 75% of $920,000 = $690,000 of lending room — $53,500 more than the $636,500 total owing. Tight, but it works.
• A one-year private second mortgage of $45,000 at 11.5% pays out the arrears, the legal costs, and leaves a cushion for the next three payments while the new job starts.
• Interest-only, that’s about $431/month — expensive money, and still cheaper than losing a $310,000 equity position to a forced sale.
• Exit: refinance the whole file to a B lender once twelve clean payments are on record — the step-by-step Ontario refinance path from there is well-worn.

Note what the lender in that example cared about: the $310,000 of equity. Not the five missed payments.

What to read next:

• Mortgage arrears in Ontario: every option, in order
• How B-lender mortgages work in Ontario
• Stopping a power of sale once it’s started

When is a new loan the wrong answer?

When the payment was never affordable and won’t become affordable. If the arrears came from a permanent income drop rather than a temporary hit, a second mortgage only rents you a few months at double-digit interest — and in Ontario, a shortfall after a power of sale can follow you, because the lender can pursue you for the difference. In that case the better conversation is about selling on your own timeline or restructuring the whole debt, and a broker should say so plainly. We do.

FAQ

Can I get a mortgage loan while in arrears in Ontario? Yes. Private lenders and some B lenders approve Ontario homeowners in active arrears. The approval runs on equity — total borrowing usually capped around 75–80% of the home’s value — and the new funds cure the default at closing.

I’ve received a Notice of Sale. Is it too late? No — but you are now on a statutory clock. The notice must give you at least 35 days before the lender can move to sell. Files fund inside that window regularly, but every day matters. Start the same week the notice arrives.

Can the lender really come after me for a shortfall? In Ontario, yes. If a power of sale nets less than you owe, the lender can sue you for the difference. It’s one of the strongest reasons to act while your equity still covers everything — waiting shrinks the cushion that protects you.

Will this show up as a new default on my credit? The opposite. Paying out arrears stops the monthly late reporting on your first mortgage. A private second mortgage often isn’t credit-reported at all; a B-lender refinance is, and paying it on time starts rebuilding your score immediately.

How fast can funds close? Private files in Ontario routinely close in 5–10 business days after the appraisal. With a Notice of Sale already served, tell your broker the exact dates on the letter — the file gets built around them.

What will it cost? Appraisal (~$400–$600), legal fees for you and the lender, and on private files a lender fee and broker fee.

Do I need my bank’s permission to add a second mortgage? No. A second mortgage registers behind your existing mortgage without the first lender’s consent. What matters is that the arrears on the first get paid — which is exactly what the closing does.

The letter on your counter has a date on it. Beat it. One call: 1-866-329-8801 — or send your numbers through the form and we’ll answer today.

Parm Mehmi, Principal Broker FSRA #13163 | FCAA #511322 Licensed in Ontario, Alberta & Saskatchewan Last updated 4 August 2026