What happens if I default on my mortgage?

Your lender will usually send a notice and give you a chance to pay the arrears. If you cannot bring the loan current, the lender may begin legal action such as foreclosure or power of sale to recover the debt.

Does default only mean missing payments?

No. While missed payments are the most common cause, default can also be triggered by failing to pay property tax, letting required home insurance lapse, or breaching other terms of the mortgage agreement.

Can I avoid default if I am struggling to pay?

Often yes. Contacting your lender early can lead to options like a payment deferral or revised schedule. Acting before you miss a payment gives you the most flexibility and protects your credit.

Mortgage Glossary

What is Default?

Default is the failure to meet the terms of a mortgage, most commonly by missing payments. When a borrower defaults, the lender can take steps to recover the debt, which may ultimately include foreclosure or a power of sale. Default also covers breaches such as failing to pay property tax or maintain required insurance.

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Quick answer

Also known as: mortgage default, loan default

Key points

Default usually means missing scheduled mortgage payments
It can also include unpaid property tax or lapsed insurance
Lenders typically give notice and a chance to bring the loan current
Unresolved default can lead to foreclosure or power of sale
Default can seriously damage your credit score
Contacting the lender early can prevent formal default

Default explained

Default occurs when a borrower does not fulfill their mortgage obligations as set out in the agreement. The most common trigger is missed payments, but default can also result from failing to pay property tax, letting home insurance lapse, or otherwise breaching the mortgage terms.

Once in default, the borrower usually receives notice and a chance to bring the loan current. If they cannot, the lender may pursue legal remedies to recover what is owed, including foreclosure or power of sale depending on the province.

What a Default is for

Default is the formal trigger that lets a lender act when a borrower stops meeting their commitments. Defining default in the mortgage contract gives both sides clear terms and lets the lender enforce its security if repayment breaks down.

How it can help you

Understanding what causes default helps borrowers avoid it, by budgeting carefully, keeping insurance and taxes current, and contacting the lender early if trouble arises. Choosing an affordable mortgage from the start matters, and Lenderoo compares 40+ lenders for free to help you find payments you can sustain.

When it comes up

A homeowner facing a temporary income drop contacts their lender before missing a payment, arranges a short-term plan, and avoids formally defaulting, protecting both their credit and their home.

Example: Missing payments

Omar loses income and misses two consecutive mortgage payments. His lender sends a notice that the mortgage is in default and asks him to bring it current.

If Omar can pay the arrears, the default is cured and the mortgage continues. If he cannot, the lender may begin foreclosure or a power of sale to recover the debt by selling the home.

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Questions & answers

Default: frequently asked questions

Common questions Canadians ask about default.

Keep learning

Related mortgage terms

Foreclosure

Legal process where a lender takes possession due to non-payment.

Read definition

Prepayment Penalty

Fee charged for paying off a mortgage early.

Read definition

Credit Score

A numerical rating of creditworthiness

Read definition

Collateral

Property pledged as security for a loan

Read definition

Mortgage Insurance

Insurance that protects the lender if a borrower defaults on the mortgage.

Read definition

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary

Mortgage Glossary

What is Default?

Find my best mortgage Back to glossary

Quick answer

Also known as: mortgage default, loan default

Key points

Default usually means missing scheduled mortgage payments
It can also include unpaid property tax or lapsed insurance
Lenders typically give notice and a chance to bring the loan current
Unresolved default can lead to foreclosure or power of sale
Default can seriously damage your credit score
Contacting the lender early can prevent formal default

Default explained

What a Default is for

How it can help you

When it comes up

A homeowner facing a temporary income drop contacts their lender before missing a payment, arranges a short-term plan, and avoids formally defaulting, protecting both their credit and their home.

Example: Missing payments

Omar loses income and misses two consecutive mortgage payments. His lender sends a notice that the mortgage is in default and asks him to bring it current.

If Omar can pay the arrears, the default is cured and the mortgage continues. If he cannot, the lender may begin foreclosure or a power of sale to recover the debt by selling the home.

Have a question about default?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

Default: frequently asked questions

Common questions Canadians ask about default.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary