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Mortgage Arrears

Understand mortgage arrears in Canadian real estate, what they are, what causes them, and how borrowers can avoid or resolve them before legal action begins.

Mortgage Arrears

May 22, 2025


What are Mortgage Arrears?

Mortgage arrears occur when a borrower falls behind on scheduled mortgage payments, typically by more than 30 days.

Why Mortgage Arrears Matter in Real Estate

In Canadian real estate, falling into mortgage arrears signals a risk of default. Lenders closely monitor arrears and may begin legal proceedings if payments are not brought up to date within a set timeframe.

Consequences of arrears include:

Borrowers in arrears may qualify for hardship programs, payment deferrals, or refinancing to catch up. Provincial laws govern how lenders must notify and respond to arrears, often requiring notice before legal action.

Understanding mortgage arrears helps homeowners take early action to avoid losing their home or facing long-term financial harm.

Example of Mortgage Arrears in Action

A borrower who misses three consecutive payments enters mortgage arrears and receives a lender notice warning of possible legal action.

Key Takeaways

  • Indicates missed mortgage payments.
  • Leads to penalties and lender notices.
  • Can trigger legal recovery processes.
  • Impacts credit and ownership rights.
  • Can be resolved through proactive steps.

Related Terms

  • Default
  • Foreclosure
  • Power of Sale
  • Refinance
  • Credit Score

Additional Terms

Absorption Rate

Absorption rate is a metric that measures the rate at which available properties are sold or leased in a specific market over a given period.. more

Corporate Restructuring

Corporate restructuring refers to the reorganization of a company’s operations, assets, or liabilities, often under court supervision, to improve. more

Consumer Proposal

A consumer proposal is a formal, legally binding agreement in Canada between an individual and their creditors to repay a portion of their debt over. more

Universal Design

Universal design refers to the creation of buildings, spaces, and products that are accessible, usable, and appealing to people of all ages and. more

Neighbourhood Amenities

Neighbourhood amenities refer to the features, services, and facilities within a community that enhance residents’ quality of life and contribute to. more

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

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