Here is a practical and realistic Financial Action Plan for a homeowner in Ontario dealing with mortgage arrears. This plan helps you assess the situation, take immediate action, and explore your options to avoid losing your home.

Step 1: Assess the Situation Immediately
- Review your mortgage terms: Note your interest rate, monthly payment, arrears amount, and lender contact details.
- Calculate your arrears: Include missed payments, late fees, legal fees (if a Notice of Sale has been served), and any unpaid taxes or insurance.
- Check your current financial position: List your income, fixed expenses, available savings, and debts.
Goal: Know exactly how much you owe and what you can afford to contribute now.
Step 2: Contact Your Lender
- Call your mortgage lender’s collections or loss mitigation department.
- Explain your situation honestly (job loss, illness, rate increase, etc.).
- Ask about available options, such as:
- Payment deferral
- Repayment plan
- Interest-only payments for a short time
- Capitalizing arrears into the mortgage (if refinancing)
Tip: Request a “redemption statement” (or reinstatement quote) detailing the full amount needed to bring your mortgage current.
Step 3: Create an Emergency Budget
- Cut non-essential spending immediately
- Pause discretionary expenses (subscriptions, dining out, shopping)
- Prioritize mortgage payments, utilities, and basic living costs
- Look for temporary income boosts (side gigs, selling items, support programs)
Goal: Free up cash flow to put toward your arrears quickly.
Step 4: Explore Financing Options
Work with a mortgage broker if needed to assess:
- Second mortgage or HELOC (if you have equity)
- Private lender short-term financing (for quick solutions)
- Refinance with a new lender to consolidate arrears
- Line of credit or personal loan (as a temporary band-aid)
Documents you’ll likely need:
- Property value estimate or appraisal
- Current mortgage balance and arrears
- Proof of income
- Credit report
Step 5: Prepare a Backup Plan
If keeping the home is not financially viable:
- List the property for sale (voluntarily) before the lender does
- Work with a real estate agent to maximize sale price and retain equity
- Use proceeds to pay off the mortgage and any legal fees
If you’re severely underwater:
- Consult a Licensed Insolvency Trustee to explore a consumer proposal or bankruptcy
- This can pause legal action and give you time to regroup
Step 6: Track Everything and Follow Up
- Keep a written log of all communication with your lender or their lawyer
- Store all statements, emails, and payment confirmations
- Follow up after any agreement to ensure it’s being honoured
✅ Summary Checklist
✅ Calculate total arrears and review your mortgage terms
✅ Contact lender and ask for a repayment or deferral plan
✅ Build a crisis budget and cut unnecessary spending
✅ Consult a broker for refinancing or second mortgage options
✅ List your home for sale if needed (voluntarily)
✅ Speak to a lawyer or trustee if power of sale has begun
✅ Track all documents and communications
To get connected to a local mortgage broker fill in a form below.