August 20, 2025
Missing one mortgage payment does not mean your home will be foreclosed on. There are steps to take to get back on track after if you’re struggling to afford your mortgage.
Missing a mortgage payment can feel stressful and overwhelming, but it doesn’t have to lead to financial ruin. Following rate increases in recent years, many Canadians are paying more for their mortgage than they were. While missing a payment can have consequences, it’s important to know that you have options to address the situation and avoid long-term financial harm.
A late or missed mortgage payment can happen to anyone. It might be a simple mistake or caused by larger financial issues. It does not automatically mean you will lose your home, however. By taking proactive steps, you can regain control of your finances and protect your home. There are a variety of ways to address the situation and limit the damage.
43% of Canadians say the high cost of living as their top financial challenge, according to a recent joint survey from BDO Debt Solutions and CPA Canada. With that in mind, it’s not hard to understand why someone might fall behind on their mortgage payments
There’s a difference between a missed mortgage payment and a late mortgage payment though. A late payment, while not a good thing, causes less damage than a missed payment.
The main difference between the two is the length of time it takes you to make the payment.
Mortgage lenders in Canada typically give you a 15-day grace period to pay after the initial deadline. You will likely also need to pay a late fee, often between $25 and $50.
Most lenders will not report the late payment to credit bureaus if you manage to pay in the 15-day window. This means a late payment is unlikely to impact your credit score.
If you have not paid your mortgage after 30 days, then it is considered a “missed payment.” At this stage, lenders usually report it to credit bureaus, which can harm your credit score. Missed payments also trigger additional late fees based on your lender’s policies, increasing your overall debt.
It's impossible to say precisely how much a missed mortgage payment will drop your credit score, as your credit score is based on your own unique credit history, but it can be significant.
Payment history accounts for 35% of your overall score, making it the single most significant factor that credit bureaus use to create your credit score. So, if you miss a payment, it can cause a large drop very quickly.
A missed payment can remain on your credit report for up to seven years, even if you pay it off quickly.
However, missing one payment isn’t always catastrophic. If you quickly pay off the one you missed and the next month's bill as well, you can minimize the harm to your credit score.
Lenders may view this as a one-time oversight rather than a sign of ongoing financial trouble.
What you want to avoid is rolling debt with your mortgage.
Rolling mortgage debt occurs when you miss a payment but resume making payments the following month without catching up on the missed amount. In this situation, each new payment you make is still considered late because your account remains behind schedule.
This cycle of being perpetually one payment behind is known as “rolling late.” Lenders typically apply late fees each month until you make up the missed payment and bring your mortgage current. These accumulating fees can increase your financial burden over time, making it even harder to catch up.
To break this cycle, you must pay the overdue amount in addition to your regular monthly payment. Doing so stops the rolling late effect, avoids future late fees, and prevents further damage to your credit score.
Foreclosure is a legal process in which a lender takes possession of a property when the borrower fails to make mortgage payments.
It doesn’t happen after just one missed payment. Most lenders wait until you’ve missed several payments before starting the foreclosure process. They will usually contact you first, offering payment plans or other options to help you catch up.
If you miss three to six months of payments, they may begin foreclosure proceedings against you.
Mortgage lenders treat foreclosure as a last resort because it’s costly and time-consuming. They prefer to resolve the issue by working with you directly.
Don’t let missing a mortgage payment be the beginning of the end of your financial stability. There are lots of ways to get yourself back on track.
Even if you know that you will only miss one payment before getting back on track you should contact your lender. If you’ve already missed one, then opening that line of communication is crucial.
Acting quickly shows you’re proactive and serious about resolving the issue.
Federally regulated mortgage lenders, such as banks, are expected to work with you to find a solution.
Your mortgage lender will likely work with you and offer some options to help get you back on track. This may include deferring payments, offer options like payment deferrals, restructuring your payment schedule, or adding missed payments to the end of your mortgage term.
Reaching out also prevents misunderstandings and gives you a chance to explain your situation and find out what options are available to you from your lender.
If you believe you may miss multiple payments, then deferring mortgage payments may be an option.
A mortgage payment deferral allows you to temporarily pause your mortgage payments if you’re experiencing financial hardship.
With a deferral, you agree to delay your payments for a specific period, often up to four months. During this time, your regular payments stop, giving you breathing room to manage your finances. Once the deferral period ends, you’ll resume paying your mortgage.
It can be a lifesaver for anyone experiencing a short-term financial issue. The catch is it may cost you thousands of dollars more in the long run.
When you defer your mortgage payments, your financial institution still charges interest on the outstanding principal. During the deferral period, you don’t pay the interest portion of your mortgage payment or the principal.
The deferred interest is added to your mortgage principal once the deferral period ends. This means your mortgage balance increases, which can lead to higher future payments or an extended amortization period.
However, federally regulated financial institutions, like banks, are expected not to charge interest on the deferred interest itself. This ensures that you won’t face compounding interest on the payments you’ve deferred.
Your financial institution may offer to defer payments if the following apply to you:
While it may cost more in the long run, it is a viable option for anyone struggling with short-term money problems.
Deferring mortgage payments is not meant to be a solution to long-term financial issues, however. If you believe that you money worries will still be affecting you in a few months time, then it may not be the best option.
If you believe you will not be able to afford your full mortgage payment in the short-term, then it may be time to consider extending your amortization period.
The amortization period is the length of time it takes to pay off a mortgage in full.
Extending the length of your mortgage reduces how much you need to pay each month, making it easier for you to afford.
The catch of course is that by extending how long you’ll be paying the mortgage; you also increase how much interest you’ll be paying in the long-term. This may mean spending thousands of dollars more over time.
Still, extending the amortization period can be a way for you to afford your monthly payments and avoid the risk of foreclosure.
If you’re struggling to afford your mortgage, speaking with a Licensed Insolvency Trustee (LIT) can be a crucial first step toward finding relief. LITs can assess your financial situation and help you explore options to regain control of your finances.
One of the ways a Trustee can help is with a consumer proposal. It allows you to reduce the amount you owe by up to 80%, and keep all your assets, including your home.
By lowering your overall debt, a consumer proposal can free up funds, making it easier to manage your mortgage payments and other essential expenses. It can be adapted to suit your needs.
Our LITs take a personalized and judgment-free approach to understanding your financial challenges. They’ll help you develop a plan that fits your needs and helps you stay on track with your mortgage. The initial consultation is free.
August 20, 2025
Missing one mortgage payment does not mean your home will be foreclosed on. There are steps to take to get back on track after if you’re struggling to afford your mortgage.
