Mortgage Arrears in Canada: The Facts and Your Strategies to Keep Your Home

Falling behind on your mortgage is stressful, but it is rarely the end of the road. Most homeowners have more options — and more time — than they think. This guide explains what mortgage arrears actually are, what happens at each stage if payments are missed, and the practical strategies that can clear the arrears and keep you in your home.

This article is general information, not legal or financial advice. Timelines and rights vary by lender and province — confirm your specific situation with a licensed professional.

What “mortgage arrears” really means

Mortgage arrears simply means you have missed one or more scheduled mortgage payments and the overdue amount has built up. You are “in arrears” for the total of the payments you owe, plus any late fees and the lender’s costs. Being in arrears is not the same as losing your home — it is the early part of a process that has several stages and, importantly, several exits.

What happens at each stage

While every lender is different, the typical path looks like this:

Around 15 days late. Most lenders apply a short grace period, after which late fees begin to accrue. A quick call to your lender at this stage often buys breathing room.

Around 30 days late. The missed payment is usually reported to the credit bureaus, which lowers your credit score. The sooner you resolve it, the less lasting the damage.

Around 90 days late (three missed payments). This is the point where lenders typically begin formal enforcement. In Ontario that means a power of sale; in Alberta and Saskatchewan it means foreclosure. Even here, you are not out of options — both processes include a redemption window during which you can bring the mortgage current or pay it out.

The single most important fact about arrears is this: acting early gives you the most options and the lowest cost. Waiting narrows your choices.

Why the bank says no — and who says yes

Once you are in arrears, most major banks will decline to refinance you. That does not mean you are out of options. B lenders and private lenders approve based on the equity in your home rather than your credit score. If you have built up equity, that equity can be used to clear the arrears in a single lump sum and reset your mortgage to good standing.

Your strategies to keep your home

  1. Reinstate the mortgage. You pay the arrears plus the lender’s costs before the redemption deadline, and the mortgage returns to normal. You do not have to pay the entire balance — just what is overdue.
  2. Refinance with your home equity. A new mortgage pays out the existing one (and the arrears) and gives you a fresh start with a manageable payment. This is the most common solution for homeowners with equity.
  3. Add a second or private mortgage. If you do not want to disturb a good first mortgage, a second mortgage can provide the lump sum to clear the arrears and stop a sale — often funding in as little as 24 to 72 hours.
  4. Consolidate your debt. If arrears are part of a bigger picture, rolling high-interest debts into one mortgage payment can lower your overall cost and prevent you from falling behind again.
  5. Sell on your terms (last resort). If keeping the home is not viable, an orderly sale you control is almost always better than a forced sale under deadline pressure, which tends to fetch a lower price.

How fast can this move?

Speed is often the deciding factor. Private and second mortgages can close in as little as 24 to 72 hours once documents are in — frequently fast enough to beat a sale deadline. If you are racing the clock, that speed is exactly why homeowners turn to an equity-based broker rather than waiting on a bank.

What to do today

  1. Open every letter from your lender and note any deadlines.
  2. Get a rough sense of your home’s value and your remaining mortgage balance — the gap is your equity.
  3. Talk to a licensed broker who places arrears files regularly. A 60-second conversation will tell you what you qualify for.

If you are behind on payments, you can start with a quick, no-obligation review of your options or call 1-866-329-8801. CreditReboot has helped Canadian homeowners clear arrears and keep their homes since 2015 — any credit, fully digital, with no branch visits.