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

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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