Mortgage Relief Options to Help You Stay in Your Home
If you’re falling behind on mortgage payments, don’t panic—but don’t wait either. Reaching out to your lender early can open up several relief options to avoid default or foreclosure. Lenders often prefer working with you to keep your home, rather than taking it back.
1. Deferral or Skip-a-Payment Programs
Some lenders allow you to pause mortgage payments temporarily—often for a few months. While this gives you short-term breathing room, remember that interest continues to accrue during this time, increasing your overall balance.
Best for: Short-term income disruption or emergency expenses.
2. Interest-Only or Reduced-Payment Periods
You may qualify to pay only the interest on your mortgage or make smaller payments for a limited period. This won’t reduce your principal, but it lowers your monthly payment and frees up cash temporarily.
Best for: Times when you’re struggling but expect your income to recover soon.
3. Extend the Amortization Period
By stretching your repayment period (say, from 20 to 30 years), your monthly payments become more affordable. However, a longer mortgage means paying more interest over time.
Best for: Homeowners who need to lower monthly costs and don’t mind a longer payoff timeline.
Refinance and Consolidation Strategies
If credit card debt or other loans are straining your finances, refinancing your mortgage or using home equity may be an option.
✅ Consolidation Loan or Mortgage Refinance
- Use your home equity to pay off high-interest debt.
- Lower your total monthly payments and reduce interest.
- May involve a second mortgage or home equity line of credit (HELOC).
⚠️ Be cautious of high loan-to-value ratios—borrowing too much against your home can be risky if your situation worsens.
Best for: Homeowners with enough equity and steady income.
Explore Debt Relief with a Licensed Insolvency Trustee
If you can’t refinance and unsecured debts are making mortgage payments unmanageable, consider professional debt relief:
📝 Consumer Proposal
- Consolidate unsecured debt into one monthly payment.
- Stop interest and collection calls.
- You keep your home, as long as you maintain mortgage payments.
⚠️ Bankruptcy
- Often a last resort.
- Doesn’t necessarily mean losing your home—equity exemptions may apply.
- Speak to a Licensed Insolvency Trustee to understand if this is right for you.
Selling or Downsizing: A Strategic Decision
If none of the above solutions work—or if housing costs are simply too high—selling your home may be the right step.
- Protect your equity by selling before foreclosure.
- If your home is underwater (you owe more than its value), the shortfall can be handled through a consumer proposal or bankruptcy.
- Consider renting temporarily to stabilize your finances before buying again.
