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How many mortgage payments can I miss?

Posted on 11 January 2023

Written by Graeme Hamilton

How many mortgage payments can I miss?

With a rising cost of living across Canada and increasing interest rates, life is becoming more and more unaffordable for many Canadians. For this reason, making essential payments on your most important debts including mortgages, household bills, and car loans can become increasingly difficult. If you are struggling, you may find that you miss a mortgage payment. You may be wondering ‘how many mortgage payments can I miss?’ To make matters worse, 53% of Canadians are worried about the increase in cost of their mortgage payments after renewal. In this article, we discuss the consequences of missing mortgage payments, and suggest ways you can gain support if you think you will miss a mortgage payment. Missed mortgage payments happen, but regardless of the reason for it, the sooner you address the situation, the better. No matter how bad you may feel your financial situation is, there is always a form of debt relief to help you. At Spergel, we have been helping Canadians on a pathway to a fresh financial future for over thirty years, and approach each individual’s unique circumstances with compassion and understanding.

What happens if you miss a mortgage payment?

Technically, your mortgage lender can choose to pursue legal action against you after the fifteen day grace period if they wish, although this is very rare. Instead, you may find the following consequences take place:

  • You will need to pay late fees, as per your mortgage contract.
  • Your credit score may be affected. After thirty days, any missed payment will be reported to Canada’s two primary credit bureaus – Equifax and TransUnion. The later your mortgage payment, the greater the negative impact on your credit score. Late payments remain on your credit report for up to seven years.
  • You may go into default. If your mortgage payment has still not been made thirty days after the due date, your mortgage will go into default. This can damage your credit score negatively and can lead to foreclosure.
  • You could lose your house. When your lender does not receive their payments, they can take back their home and sell it to recoup their losses. This process is known as foreclosure. If you are based in Newfoundland, New Brunswick, Ontario, or Prince Edward Island, this process is instead known as power of sale, and is a much quicker process than foreclosure.
  • You may struggle to secure credit in the future. Given the increased risk of not receiving their repayments, lenders are likely to think twice before agreeing to lend you more credit in future until your credit score is rebuilt.

How late can a payment be before it is considered missed?

Generally speaking, most lenders in Canada will allow you a fifteen day grace period before a mortgage payment is considered missed. After this period, you will begin to incur late fees and any other consequences in line with your contract. If you have still not made your mortgage payment thirty days after your due date, your lender will report the missed payment to Canada’s two primary credit bureaus. At this point, you will begin to face a negative impact on your credit report. Missing a mortgage payment is not to be confused with skipping a payment. If you miss one mortgage payment but continue to make the following payment, you are not considered back on track. In fact, the following payment is simply considered a late instalment of the missed payment. Until you make two payments to make up for the one that was missed, you are in a ‘rolling late’ scenario, where every payment made afterwards is considered a late payment. This incurs late fees and can have a very negative impact on your credit report. In order to avoid this situation, you should make up for your missed payment as quickly as you can, and then continue to make your payments as they are owed.

How many mortgage payments can I miss?

If you are concerned about losing your home or facing foreclosure or a power of sale, you may well be wondering how many mortgage payments you can miss before this happens. Foreclosure in Canada is a length and costly process, and so it is a last resort for many lenders. It will not be triggered as soon as you miss one mortgage payment, for instance. Once you miss payments, you can expect to receive letters from your lender after thirty, sixty, and ninety days. If you fail to respond to this correspondence after ninety days, you can expect foreclosure proceedings to start. In short, the answer is you cannot miss any mortgage payments without facing consequences. Lenders take missed mortgage payments very seriously, and fees and penalties can quickly build up if you fall behind on your mortgage.

What should I do if I think I will miss a mortgage payment?

If you are struggling financially, you may be worried that you are going to miss a mortgage payment. Perhaps you are already in arrears and are unsure of what to do next. There are a few steps you should take sooner rather than later:

  • Be proactive. If you think you will miss a mortgage payment, you should get in touch with your lender as soon as possible. They will be more inclined to help you where they can and will be less stringent on the consequences of missing a payment if you let them know before you miss a payment.
  • Make a payment as soon as you can. Depending on your payment history and the circumstances under which you will miss a payment, your lender may allow you to make a late payment. They might even work with you to create a repayment plan, or adjust the mortgage or amortization period.
  • Speak to a Licensed Insolvency Trustee. Licensed Insolvency Trustees are the only professionals in Canada legally able to file all forms of debt relief. If you are struggling to make your mortgage payments, they can look at your circumstances and recommend a form of debt relief to help you make your mortgage payments more easily moving forward.

If you are wondering ‘how many mortgage payments can I miss?’, the chances are you need support from Spergel. Our experienced Licensed Insolvency Trustees have helped over 100,000 Canadians on their journeys to debt relief, freeing up other debts to enable them to make their mortgage payments more comfortably. Book a free consultation today – our approachable and understanding trustees are here to help you.

Graeme Hamilton

Graeme Hamilton

Graeme Hamilton is a Chartered Insolvency and Restructuring Professional with over 10 years’ experience as an LIT (Licensed Insolvency Trustee). He is also Spergel's resident expert on bankruptcy and debt relief in the Ontario region. Prior to establishing his career in the insolvency industry, Graeme lived in Cambodia doing volunteer work with NGO's.

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