What to Do If You Can't Make a Mortgage Payment

A missed mortgage payment is a warning sign, not an automatic ending. If you contact your lender before the payment is overdue, most federally regulated institutions are expected to work with you on a mortgage relief measure tailored to your situation. Acting early is far more effective than waiting until several payments have been missed and collection activity has begun.

What actually happens when you miss a payment

Your mortgage agreement defines what counts as default, and a missed payment is one of the clearest examples. Once you are in default, the lender has a legal right to recover the amount owed, which can eventually lead to a forced sale of the home. Lenders also report missed payments to the credit bureaus, which can affect your credit score and your ability to borrow in the future.

Timelines vary by lender and province, and the process usually begins with reminders and notices before anything more serious. The earlier you engage, the more options remain open.

Act before the payment is late

The single most useful step is a phone call. Tell your lender what has changed — a job loss, a medical event, a separation, or a sharp rise in rates — and ask what relief measures are available. Federally regulated financial institutions are expected to monitor for early signs of financial stress and to encourage borrowers to reach out when they are worried about payments.

They are also expected to provide information at no additional cost so you can make a timely decision, and to offer the most appropriate relief measures for your circumstances. The renewal guide is useful if your difficulty coincides with a renewal date.

What to have ready when you call

Being prepared makes the conversation shorter and more productive. Have your mortgage number, your recent pay stubs or income records, a list of your other debts and their minimum payments, and a rough monthly budget. Explain the change in your circumstances honestly and ask specifically which relief measures apply to your mortgage type.

1. Ask what options exist and which one the lender recommends for your situation.
2. Ask for the impact of each option in dollars and in months added to your amortization.
3. Ask how the option affects your credit report and whether a missed payment will be reported.
4. Ask for the agreement in writing before you consent to anything.

Relief measures your lender may offer

The available options depend on your lender, your mortgage type, and your circumstances. Common measures include:

• Mortgage payment deferral — delaying payments for a set period, often up to a few months, with the deferred amounts recovered afterward.
• Extended amortization — lowering the payment by stretching the schedule, which raises total interest over time.
• Special payment arrangements — a temporary reduced payment agreed for a set period.
• Capitalization — adding missed payments to the principal, which increases the balance.
• Interest-only payments — paying the interest portion while principal payments are deferred, usually to a capped amount.
• Fee and penalty relief — waiving certain internal fees or prepayment penalties in specific situations.

Before you consent to any measure, your lender is expected to explain the impact in clear language: the amount you owe before the change, the effect on your total cost in dollars, the effect on your amortization, and your new payment, rate, and date.

How a missed payment affects interest and credit

Interest continues to accrue on the balance you owe, even when a payment is deferred. Canadian mortgages compound interest semi-annually, so the effective monthly rate is calculated as (1 + annual rate / 2)^1/6 − 1. On a $500,000 mortgage at a nominal 5.00%, that works out to about 0.4124% per month, and the first month's interest is roughly $2,062. If a full monthly payment of about $2,908 were added back to the balance, it would attract about $147 of extra interest over a year under these illustrative assumptions. That is the cost of letting an arrears balance sit.

If your lender agrees that you may miss a payment as part of a relief measure, it is expected not to report that missed payment to the credit bureaus. Unarranged missed payments, by contrast, are normally reported. Confirm the details in writing so you know exactly what will and will not be reported.

Selling, refinancing, or using home equity

If your difficulty is severe and long-lasting, selling the home may be the least damaging path, and lenders are expected to discuss the considerations with you. Selling may allow you to pay off the mortgage and avoid a forced sale, though it means giving up the home.

Refinancing or accessing equity can sometimes consolidate higher-interest debt, but it also increases the amount secured against your home and can extend the time you carry a mortgage. The home equity line of credit guide explains how that borrowing works. Treat any refinance as a decision to weigh carefully, not a quick fix.

Free help and your rights

You do not have to navigate this alone. Credit counselling services and non-profit debt advisors can help you build a plan, and the Financial Consumer Agency of Canada publishes plain-language guidance on relief measures and your rights. Before agreeing to anything, ask for the disclosure in writing and read it against the payment calculation guide so you understand how the change affects your numbers.

Keep a written record of every call, including the date, the name of the person you spoke with, and what was agreed. If a relief measure is approved, store the confirmation with your mortgage documents. That record makes it far easier to resolve any later disagreement about what was promised. For the long view, amortization explained shows why extending a schedule raises total interest. Use the mortgage payment calculator to test what a reduced payment would mean.