Missed a Mortgage Payment in Canada? Here’s What Really Happens (2025)

Missing a mortgage payment can feel scary — but don’t panic just yet. It happens to more people than you might think, and there are ways to fix it before it spirals out of control. Whether you forgot, had a cash crunch, or something unexpected came up, this guide will walk you through what really happens in Canada when you miss a payment and what to do about it.

What Actually Happens When You Miss a Payment

Your mortgage payment is usually due once a month (or biweekly if you’ve set it up that way). If you miss it, your lender won’t show up at your door right away. Instead, they mark your payment as ‘past due’ and will likely send a reminder or make a phone call within a few days. Most lenders wait at least 15 days before charging a late fee. That said, missing a single payment can still start a chain reaction — especially if you don’t act quickly to fix it.

Do You Get a Grace Period?

Yes, most Canadian lenders offer a short grace period — usually about 15 days after your payment is due. If you make the payment within this window, there’s often no fee or penalty. But if you go beyond that, you might face late fees, interest charges on the overdue amount, and a note on your credit file. It’s best to call your lender as soon as you realize you’re going to be late — they might be more flexible than you expect.

Real-Life Example: Aman’s Missed Payment Spiral

Aman, a freelance graphic designer in Mississauga, missed a mortgage payment in March 2025 after a client delayed payment on a big project. He figured it was no big deal and assumed he’d catch up the next month. But when April came, he still didn’t have enough to cover both months — and now the lender had added a $75 late fee and reported the delinquency to his credit bureau. By June, he was three payments behind and received a formal notice of default. Had he called his lender right away, he might have been able to defer or restructure the payment — but waiting cost him both money and peace of mind.

Rolling Late Payments: Why One Missed Month Can Snowball

When you skip a mortgage payment, your lender doesn’t just forget about it. Unless you arrange something, they’ll still expect that money — and next month’s too. This is called a ‘rolling late.’ You’re now behind by two months, and each new month adds more stress. Late fees pile up, your credit takes a hit, and after a few missed payments, your lender may start legal proceedings to take back the property.

When Does It Affect Your Credit Score?

Usually, a missed mortgage payment won’t show up on your credit report unless it’s more than 30 days late. But once it does, it can seriously damage your score — especially since your mortgage is a major account. A single 30-day late payment can drop your score by 50 to 100 points. Worse, it stays on your report for up to 6 years. That could affect your chances of getting a car loan, credit card, or future mortgage at a good rate.

Late Fees, Legal Notices, and Lender Actions

After 15 to 30 days, most lenders will charge a late fee — usually a fixed amount like $50 to $100, or a percentage of the overdue payment. If you still haven’t paid after 60 days, they may issue a demand letter, which is a formal notice asking you to pay or face legal consequences. Beyond that, the lender can start the legal process of taking back the home. In Ontario and most provinces, this is done through a process called ‘power of sale’. In others like Alberta, it may involve full foreclosure.

What is Power of Sale and How Is It Different from Foreclosure?

In most of Canada, lenders use a legal process called ‘power of sale‘ to reclaim the property. It’s faster and cheaper than foreclosure. Here, the lender gives you notice, then sells your home to recover what’s owed. If there’s anything left after covering fees and the mortgage, you get the balance. Foreclosure, used in Alberta and Quebec, takes longer and involves court. But if the home sells for less than what you owe, the lender may not come after you for the shortfall. Both are serious — but neither happens overnight.

How to Recover from a Missed Payment

The most important step is to contact your lender right away. Many banks will work with you — especially if this is your first time missing a payment. Options include a payment deferral, adding the missed amount to the end of your term, or adjusting your payment schedule. You might also consider using a line of credit or savings to catch up quickly before penalties pile up. And if you’re really struggling, speak to a mortgage broker or credit counsellor to explore refinancing or debt consolidation.

“With more Canadians missing payments this year, it’s part of a larger trend showing a nationwide rise in mortgage arrears.”

Final Advice from a Mortgage Expert

Missing a mortgage payment doesn’t make you a bad homeowner — life happens. But the sooner you take action, the better your outcome. Never ignore a missed payment, and don’t wait for the lender to come chasing. Most lenders in Canada prefer to work things out rather than go through the legal process of taking your home. You can read our comprehensive mortgage guide here. Stay calm, communicate early, and get advice if you need it.

Your mortgage is a big responsibility, but with the right steps, one missed payment doesn’t have to define your financial future.