How to Avoid Losing Your Home, Save a Deal, or Reduce Your Debt Load

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The growing divide among consumers amid economic uncertainty is becoming increasingly clear, as the number of missed payments has risen compared to last year, according to a new Equifax report.

Rebecca Oakes, Vice President at Equifax Canada, said much of this trend comes down to the high cost of living, rising unemployment, and mounting pressure from trade wars. "To keep making your payments... you need income, you need a good job," Oakes said. "When there's economic uncertainty, that has a serious impact." The report found that 1 in every 22 Canadian consumers with credit, or 1.4 million people in total, missed at least one credit payment in the first quarter of 2025.

The report notes that the delinquency rate among consumers without a mortgage rose 8.9% year-over-year, compared to 6.5% among mortgage holders. A large volume of mortgage renewals has also contributed to rising debt and delinquency levels. Many homeowners who locked in low rates early in the COVID-19 pandemic are now facing renewal at a much higher rate. According to the report, Ontario emerged as a hot spot for financial stress in the first quarter. The rate of mortgages 90 days or more in arrears rose significantly in the province compared to a year earlier. Ninety days of missed mortgage payments is the point after which a bank is legally entitled to begin a power of sale process on your property. If you think you might run into payment trouble in the near future, or you're already struggling to keep up with your mortgage payments, we can most likely offer you a solution!

Of course, the right move is to reach out to a mortgage broker or your bank ahead of time, before you miss any mortgage payments - but more often than not, that's not how it plays out. Whether it's the entirely human instinct to hide the situation, hoping it'll resolve itself, desperate attempts to stretch a budget to cover everything, or unforeseen circumstances, borrowers tend to reach out to us only once they're no longer able to keep up with their debts at all. In that kind of situation, it's essential to act quickly, clearly, and without panic, in order to save the property and "buy" time to get back on your feet.

Here's what we can offer to help protect your home from a forced sale, save a purchase deal, or reduce the debt load for homeowners going through a difficult stretch or facing a significant, temporary drop in income:

Home Equity Lines of Credit

This is the most cost-effective option for resolving temporary financial difficulties, and it works well as long as your situation isn't yet critical and you don't have any missed payments on your existing mortgage. A Home Equity Line of Credit (HELOC) is registered in second position (in terms of registration priority on title) behind your existing mortgage. Its limit is capped at 80% (combined with your first mortgage) or 65% (if there's no mortgage and the HELOC is registered in first position) of your home's value, and it can amount to many hundreds of thousands, or even millions, of dollars, depending on your equity and qualification. Homeowners can draw as much as they currently need and pay interest only on the amount they've actually used, keeping costs down. A HELOC is a fully open line of credit that can be paid down to zero at any time with no penalty, and then drawn on again later, up to your approved limit. We also offer unique HELOC options for our self-employed borrowers who can't qualify based on income at other banks.

Alternative or Private Mortgages

More often than not, though, when financial trouble hits or payments get missed on a mortgage or other debt, the money is needed "yesterday." In that case, qualifying for a HELOC is usually no longer possible, or there simply isn't enough time. That's when we quickly arrange alternative or private mortgages in second position behind your existing mortgage, to save your home from a forced sale or urgently cover other debt obligations or unexpected expenses. This kind of financing can be arranged within 48 to 72 hours and is based largely on the equity available in your home, with much less weight placed on credit history, income, or other debts. Alternative private financing offers a fast, temporary solution - protecting your home from a forced sale or letting you close a purchase if, say, your existing home hasn't sold in time yet. Because of the higher risk involved, though, these mortgages come at a higher cost, are issued for a short term (usually no more than a year), and private lenders care a great deal about exactly how their loan will be repaid - for example, through a sale once market conditions improve or renovations are completed, or through refinancing with a bank once your financial situation is resolved.

A recent example: the Shevchenko-Fernandez family bought a beautiful bungalow in southern Niagara this past January. To close the deal, they needed to sell their existing condo townhouse in Etobicoke. One of the major banks approved their mortgage, but on the condition that they sell their existing home first. Unfortunately, given the weak state of the real estate market, the family wasn't able to sell their townhouse in time. The sellers of the new home wouldn't agree to push back closing, since they themselves had already bought elsewhere and were counting on those proceeds. We arranged private financing for this young family within 3 business days! A fully open mortgage, interest-only. Yes, this option costs more, and there's an additional fee to pay, which is why it's only used for urgent, short-term situations - but it let them close on the purchase, avoid losing their deposit, and avoid the risk of potential lawsuits. Once the deal closed, the clients were able to sell their existing home without added stress and refinance the pricier private mortgage into the best available bank rate.

No-Payment, No-Qualification Mortgages

We've written before about an innovative mortgage product: the reverse mortgage. And if you're under 55 and think this section doesn't apply to you, don't skip past it just yet! You almost certainly have parents, grandparents, or other relatives and friends who could benefit from this information. Today, the reverse mortgage serves as another tool against difficult financial situations for homeowners who spent years paying down their most significant investment, their home, and are now facing financial hardship and a sharp drop in income due to business trouble, layoffs, or retirement. Below, we'll briefly explain how to make that investment work for you during your lifetime, rather than simply becoming an inheritance after you're gone.

This product can help you maintain your usual lifestyle without changing anything, while continuing to build equity as home values rise, even modestly, all without making any regular payments. While a traditional mortgage requires you to make payments and build equity in your home as you pay down the principal, a reverse mortgage lets you access money from the value of your home without making payments (or, if you choose, paying only the interest) for the duration of the loan.

Once homeowners reach the minimum qualifying age of 55, setting up a reverse mortgage is fairly straightforward. That equity can be accessed either as a lump-sum, tax-free payment, or as monthly payments to help maintain a comfortable standard of living. Reverse mortgages are structured so that the total debt can almost never exceed the value of the home, and if it ever did, that risk falls on the bank, not the homeowner, who is never left owing money. A reverse mortgage balance is typically repaid when the property is sold, when the owner moves into a retirement home, or when the heirs sell the property after the owner's passing. A reverse mortgage is often used to pay off an existing mortgage and other debts, eliminating monthly payments entirely. At the same time, it can be a highly flexible tool, also used to boost monthly income, pay for home care, cover unexpected expenses, reduce taxes as part of tax planning, purchase a vacation or investment property, or help children, grandchildren, or other family members with a down payment on their own property or other projects. After all, it's sometimes wonderful to witness the joy your children or grandchildren feel from receiving part of their inheritance while you're still there to see it!

Lowering Your Mortgage Rate and Consolidating Debt

These days, we're increasingly hearing from homeowners who took out their mortgages a year and a half to two years ago, back when fixed rates were well above 5%.

With rates now under 4%, in some cases it makes real sense to refinance your mortgage, lower your monthly payment, and roll expensive credit card debt into your new mortgage as well.

If you own a home and are struggling to keep up with credit card or mortgage payments, we can most likely find a solution for you! With more than 20 years of experience in banking and mortgage lending, we can offer a lower rate and payment on your existing mortgage renewal, arrange a home equity line of credit, consolidate high-interest unsecured debt into a single, manageable mortgage payment, save a purchase deal, and much more!