If you have fallen behind on mortgage payments in Ontario, acting early matters more than almost anything else. Lenders generally issue a formal demand before starting power of sale, and there is usually a window in which arrears can be brought current — often by refinancing or arranging a second mortgage. Options narrow considerably once enforcement is under way.
Roughly how the process runs in Ontario
For the timeline in detail, including the Notice of Sale and the redemption period, see how to stop power of sale in Ontario.
This is a general outline, not legal advice, and timelines vary by lender and circumstances.
- Missed payments — late fees apply and the lender begins contacting you
- Demand letter — formal notice that the full balance is being demanded
- Notice of Sale — under Ontario’s Mortgages Act, typically issued after default has continued, with a statutory redemption period
- Enforcement — the lender proceeds toward sale of the property
If you have received a Notice of Sale or any court document, speak to a lawyer promptly. Timelines are strict and rights can be lost by waiting.
Why acting early changes the outcome
Early on, arrears are a number that can be paid. Later, the number includes legal costs, accumulated interest and enforcement expenses — and it grows. More importantly, lender appetite shifts: many will consider a file with two months of arrears and a clear explanation, while the same file under active enforcement is materially harder to place.
The most expensive decision available here is usually delay.
What may still be possible
- Bringing arrears current through a second mortgage, leaving the first in place
- Refinancing the first mortgage entirely, where qualification allows
- A private first mortgage that pays out the mortgage in default, buying time to restructure
- A repayment arrangement with the existing lender, which costs nothing to ask about
- Selling on your own terms — not the outcome anyone wants, but a controlled sale generally realises more than an enforced one
What lenders weigh in an arrears file
Equity is the primary factor — there needs to be enough room to cover the arrears, the costs and a margin. Beyond that: why the arrears happened, whether the cause has passed, whether income supports the payments going forward, and whether there is a credible plan. A explainable, resolved cause is treated very differently from an ongoing one.
Costs to expect
Arrears files typically involve second-position or private financing at a higher rate, plus lender and brokerage fees, legal costs, appraisal and registration. If enforcement has begun, the lender’s legal costs are usually added to the payout figure. Ask for the total cost and the net advance after everything is deducted.
Risks to understand
- Borrowing to cure arrears does not fix an underlying income shortfall — if the payments weren’t affordable before, they may not be now
- Private financing costs more and terms are short; renewal is not guaranteed
- Fees on an urgent file can be significant
- Missed payments on the new arrangement can escalate quickly
- Final approval depends on the complete application and lender review
Alternatives worth considering
Speak to your existing lender first — some will accept a repayment arrangement, and it costs nothing to ask. Where the difficulty is broader than this mortgage, independent advice from a Licensed Insolvency Trustee should be obtained. And if any legal step has been taken, a lawyer — promptly.
Documents generally needed
Mortgage statement showing the arrears, all lender correspondence including any demand or Notice of Sale, property tax bill, proof of insurance, photo ID, income documents, and an explanation of what caused the arrears and what has changed.
Frequently asked questions
How far behind is too far?
There isn’t a fixed line. Equity and the stage of enforcement matter more than the number of missed payments. Files well into the process have been resolved where equity was sufficient; files with minimal equity are difficult even early. Earlier is always easier.
Will this show on my credit report?
Missed mortgage payments are reported and affect credit for some years. Curing the arrears stops further damage and starts the recovery, but doesn’t erase the history.
Can I get a mortgage while in power of sale?
Sometimes, where equity is sufficient and the file can be placed with a lender who works in this space. It cannot be promised, and approval always depends on the full circumstances and lender review.
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• A lawyer — if any formal notice has been served
• A Licensed Insolvency Trustee — where the difficulty runs deeper than one mortgage
This page is general education about mortgage options in Ontario. It is not legal, accounting, tax or insolvency advice, and it is not an offer of credit. Please seek independent professional advice for your own situation.