Mortgage Arrears: What Are Your Options?
Falling behind on your mortgage payments is one of the most stressful situations a homeowner can face. The fear of losing your home, the calls from your lender, the uncertainty about what comes next — it can feel paralyzing.
The most important thing to know is this: you have more options than you think, and the sooner you act, the more of them will be available to you.
What Are Mortgage Arrears?
Mortgage arrears occur when you miss one or more scheduled mortgage payments. As soon as you miss a payment, your lender will begin the process of notifying you and attempting to collect. If arrears are not resolved, the lender can initiate power of sale proceedings — the process by which they can force the sale of your home to recover the money owed.
How Quickly Does Power of Sale Happen?
In Ontario, lenders can begin power of sale proceedings after just 15 days of a missed payment — though in practice, most lenders wait until payments are 3+ months overdue before filing. Once power of sale is initiated, you typically have limited number days to redeem (catch up) before additional costs start to add up. This is why acting early is critical.
Option 1: Contact Your Lender Directly
If your arrears are due to a temporary hardship (job loss, medical issue, family emergency), contact your lender immediately. Many lenders have mortgage deferral or payment arrangement programs, especially for clients who have been in good standing.
This works best when arrears are early-stage and your hardship is clearly temporary.
Option 2: Refinance to Include Arrears
If you have equity in your home, refinancing your mortgage to roll in your arrears is one of the most effective solutions. This brings your mortgage current, stops the power of sale clock, and gives you a fresh start with a new payment schedule.
Traditional banks will not refinance a mortgage in arrears — but alternative and private lenders can and do. This is one of the most common situations we handle at CreditReboot.
Option 3: Second Mortgage to Cover Arrears
If you don’t want to refinance your entire mortgage, a second mortgage can provide the funds needed to bring your first mortgage current. This keeps your existing mortgage intact while stopping the default proceedings.
Option 4: Sell the Property
If your equity is significant and you’re unable to service even a restructured mortgage, selling on your own terms gives you control over the process and outcome. You’ll net far more from a voluntary sale than from a power of sale, where your lender’s goal is to recover their loan quickly — not to maximize your proceeds.
The Golden Rule: Act Fast
Every week you wait narrows your options and increases your costs. Legal fees, penalties, and interest accumulate quickly during power of sale proceedings.
A licensed mortgage broker can assess your equity, contact lenders on your behalf, and often present you with an approval within 24-48 hours — enough time to stop the process in its tracks.
Ready to Get Started?
If you’ve been turned down by the banks or are struggling with your current mortgage situation, CreditReboot Mortgages is here to help. We specialize in finding solutions for homeowners who don’t fit the traditional lending box.
Call us today at 1-866-329-8801 or visit www.creditreboot.ca to start your free consultation. Our team of licensed mortgage professionals (FSRA #13163) will review your situation and present you with real options — fast.
Don’t let a bank’s decision be your final answer.
