What is a mortgage acceleration clause and how does it affect me in Ontario?

An acceleration clause is a provision in a mortgage contract that allows the lender to demand immediate repayment of the entire outstanding balance upon a specified trigger event — typically a default. Instead of simply demanding the missed payments, the lender can call the entire loan due at once.

Common triggers for acceleration include missing a set number of payments, failing to maintain property insurance, failing to pay property taxes, selling the property without the lender's consent (for non-assumable mortgages), or materially misrepresenting information at application. Once acceleration is triggered, the full balance becomes payable immediately, which is typically the precursor to power of sale or foreclosure proceedings.

Most standard institutional mortgages in Canada contain acceleration clauses. Borrowers often do not notice this clause buried in lengthy mortgage documents, which is one reason it is important to review the mortgage commitment and underlying documents with your lawyer before signing. If you are in financial difficulty, understanding whether your lender has accelerated your mortgage — versus simply claiming arrears — affects your legal options and the urgency of your response. Contact a lawyer immediately if you receive any notice that appears to invoke the acceleration clause.