What Happens If You Miss a Mortgage Payment in Canada?

Missing a mortgage payment isn't just a small slip-up—it hits your credit score hard if you're more than 30 days late. Fees start adding up fast, and your lender will report this missed payment to the two main credit bureaus, Equifax and TransUnion.

Don't panic, though! You have options to handle this situation and protect your finances.

For informational purposes only. Always consult with a licensed mortgage or home loan professional for information tailored to your specific situation.

Remember This When You're Worried About Missing a Payment

• Many lenders give a 15-day grace period before you’re hit with late fees (usually $25–$50)
• Late payments aren’t reported to the credit bureaus until they’re late by 30 days
• Call your lender right away to see if they offer payment plans or deferrals
• If you miss a payment, try to double up on the next one, or you’ll get caught in a “rolling late” cycle
• Lenders typically send notices after 30, 60, and 90 days of missed mortgage payments
• Check whether your province uses foreclosure or power of sale; it makes a big difference in how long you have to make up your payments

Your Credit Score Takes a Big Hit

When you miss a mortgage payment, your credit score feels it first. And if you're over 30 days late, the damage gets serious.

Payment history makes up a huge part of your credit score. Even one late payment can knock it down as much as 100 points, especially if you have a high credit score. That's a big drop!

This makes getting new loans or good interest rates much harder. A missed mortgage payment can stay on your credit report for up to seven years, too. It’s a long time for one mistake to follow you around, so even if money's tight, tackle missed payments as fast as possible.

Making mortgage payments on time going forward helps, but that initial hit to your score will stick around, affecting your financial options for years.

Late Fees Add Up Fast

Missing a mortgage payment costs more than you might think.

First, expect a late fee between $25 and $50 right after your due date passes. Many lenders provide a 15-day grace period without charging late fees, but your payment would still be considered late.

If you “skipped” a payment last month, but paid on time this month, you’re not actually on time. The lender takes your payment and applies it to the “skipped” payment—and now the current month’s payment still hasn’t been paid.

When you’re in a “rolling late payment” situation, your credit score gets dinged for every late payment, and every month incurs new late fees. The only way to stop it is to double up on your mortgage payment.

Whenever you hit the 30-day mark without paying, your lender reports this to credit bureaus, hurting your credit score. Any new loans you get for the next seven years may have a higher interest rate, costing you money.

If you hit the 90-day mark, you’re at risk of losing your home and all the equity you’ve built in it.

How Foreclosure & Power of Sale Work

Understanding the foreclosure process can help you avoid it. In Canada, it depends on where you live.

Many provinces, including Alberta and British Columbia, use court-ordered foreclosure. After 90 days of nonpayment, your lender will give you a notice of default. If you don’t make up the missed payments by the deadline in the notice, the lender starts the foreclosure process.

The judge usually gives you six months to repay the missed payments, plus interest, taxes, and legal fees. If you can’t, your home is given to the lender by court order.

In a foreclosure, the lender becomes the owner, and if they can’t sell the property for enough to cover what you owed, they can’t come after you for more money. But if they sell it for more than you owed, you don’t get the extra money.

Others like Ontario and New Brunswick use what’s known as “Power of Sale,” which lets your bank sell your home without going to court after they give you proper notice.

You'll typically get notices when you're 30, 60, and 90 days late. In theory, this gives you enough time to work things out or catch up on your late payments. During Power of Sale, you get a 35-day notice to pay what you owe, plus penalty fees.

If you don’t pay, the lender gets a Writ of Possession, evicts you, and sells your home. If it sells for more than what you owe (to the lender and any other lienholders), you get the remaining money. But if it doesn’t, the lender can sue you for the rest of the money.

Talk to Your Lender Right Away

Picking up the phone to call your lender might feel scary when you’re in this stressful situation, but it's the smartest move when you're struggling with mortgage payments.

Call your lender before you miss a payment, not after. They might offer repayment plans or other options. If worse comes to worst, you might get approval for a short sale to help you avoid the worst damage to your credit score. 

If you need any more convincing, lenders prefer working with borrowers who reach out early. They might offer temporary payment breaks or hardship programs. By explaining your situation, you'll learn what options you have to get back on track, keep your home, and avoid foreclosure.

Making that call shows good faith and makes your lender more likely to work with you.

Remember: lenders would prefer not to foreclose. It’s a long, expensive process. They usually don’t recover the full property value. They’re probably more open to helping you get through this than you think.

Ask your lender about loan modification options. They’re like refinancing, but specifically designed for borrowers struggling with their current payments.

Fix Your Finances After Missing a Payment

When you miss a mortgage payment, you’ll need to act fast to rebuild your financial health.

Start by reaching out to your lender as soon as you know you'll have trouble paying. This might open doors to options like payment plans or deferrals that make the situation more manageable.

Focus on catching up quickly to avoid more late fees and prevent mortgage default or foreclosure.

Look at your budget and adjust your spending to make sure future payments happen on time. If needed, talk to a financial advisor or lawyer for advice geared toward your particular situation.

Work on rebuilding a good payment history by making all of your payments on time going forward. This gradually improves your credit score and strengthens your finances.

For informational purposes only. Always consult with a licensed mortgage or home loan professional for information tailored to your specific situation.

The Road to Recovery Starts Today

Missing a mortgage payment in Canada hits your finances hard. Your credit score could significantly drop if you're more than 30 days late, and the longer you’re late, the worse it’ll get. 

The best advice is to talk to your lender early. Doing so might help you avoid the worst-case scenario—foreclosure—and minimize damage to your credit score.

As scary as this all is, thousands of Canadians just like you have missed a mortgage payment at some point. Take action now to protect your financial future.