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.
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:- Credit score damage
- Collection calls and late fees
- Initiation of power of sale or foreclosure
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
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)