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Arrears is the total amount of missed mortgage payments a borrower currently owes a lender; falling into arrears is usually the first stage of mortgage default, before more serious enforcement steps begin.
A single missed payment puts an account into arrears, and most lenders will contact the borrower well before considering formal legal remedies. At this stage, options are often broader — a short-term repayment plan, a temporary deferral, or restructuring the payment schedule — because the amount owing is still relatively small.
If arrears continue to grow without resolution, the file can move toward the lender’s formal default and enforcement process, which in Canada follows provincial law and typically leads to either a power of sale or judicial foreclosure, depending on the province.
Reported to credit bureaus: mortgage arrears are typically reported on a borrower’s credit file, affecting their credit score.
Early options are wider: lenders generally have more flexibility to offer repayment arrangements before arrears escalate into formal default proceedings.
Insured files: on a default-insured mortgage, the insurer (CMHC, Sagen, or Canada Guaranty) may be notified once arrears reach a level the lender is required to report.
Provincial enforcement timelines vary: how quickly arrears can lead to power of sale or foreclosure proceedings depends on the province the property is in.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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