Can I Defer My Mortgage Payments in Ontario If I Lose My Income?
No, a mortgage payment deferral is not a right in Ontario. It is an agreement with your lender, so a lender can refuse. A deferral usually lasts up to 4 months, and interest keeps accruing and is usually added to the principal.
Afterwards you will owe more, and your payments or amortization may increase. Banks and other federally regulated lenders are expected to offer tailored relief to borrowers at risk of default on their principal residence, with your express consent. That expectation covers only an existing residential mortgage on your principal residence, and not provincially regulated or private lenders.
Other options a lender may offer include blend-and-extend, capitalizing missed payments, interest-only payments for a limited time, or a plan to sell the home yourself at fair market value. Whether any of these is available depends on your lender and your mortgage. If you are already behind, you can stop the lender from enforcing the acceleration clause by paying the arrears and its necessary expenses, but once a power of sale has closed, this right no longer applies and you are limited to a claim for damages against the lender. Ask early, get any agreement in writing, and consider speaking with a lawyer.
Key takeaways
- A deferral is an agreement with your lender, not a right, so a lender can refuse it.
- Interest keeps accruing during a deferral and is usually added to the principal, so you owe more afterwards.
- The federal relief expectations apply to federally regulated lenders and an existing mortgage on your principal residence, not to provincially regulated or private lenders.
- If you fall behind, paying the arrears and the lender's necessary expenses can stop it enforcing the acceleration clause, and you can require a written statement of arrears that the lender must answer within 15 days.