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Seeking Financial Assistance: Support Programs for Homeowners in Mortgage Default

Homeownership is a cornerstone of financial stability and security for families across Canada. However, unforeseen circumstances such as job loss, medical emergencies, or economic downturns can lead to financial difficulties that may result in mortgage default.

To provide relief and prevent the loss of homes, the Canadian government and various financial institutions have established a range of support programs aimed at assisting homeowners facing mortgage default. This article explores the key support programs available to homeowners in mortgage default in Canada, highlighting their eligibility criteria, benefits, and application procedures.

1. Homeowners’ Financial Assistance Programs

a. Canada Mortgage and Housing Corporation (CMHC)

The CMHC offers valuable assistance through several programs to help homeowners facing mortgage default:

  1. Mortgage Payment Deferral: This program allows homeowners to temporarily suspend their mortgage payments for up to six months. During this period, the accrued interest is added to the outstanding mortgage balance. This option provides breathing room for homeowners to regain financial stability without facing the immediate threat of foreclosure.
  2. Repayment Assistance Plan (RAP): The RAP is designed to aid homeowners with low or moderate incomes who are struggling to make their mortgage payments. This program adjusts monthly mortgage payments based on household income and size, ensuring they remain affordable. The CMHC collaborates with mortgage lenders to implement these adjustments.

b. Home Affordable Modification Program (HAMP)

HAMP is a federal program that assists homeowners in modifying their mortgage terms to make them more manageable. It primarily targets homeowners facing financial hardships, allowing them to negotiate lower interest rates, extended loan terms, or reduced principal amounts. These modifications are meant to prevent foreclosure and help homeowners keep their homes.

2. Provincial Support Programs

a. Ontario

The Ontario government offers support through the Ontario Renovates Program. While not exclusively designed for mortgage default, this program provides financial assistance for necessary home repairs and accessibility modifications. By maintaining the value of their homes, homeowners can avoid further financial strain that could lead to mortgage default.

b. Quebec

Quebec homeowners can benefit from the Mortgage Assistance Program (MAP). This program provides temporary financial assistance to eligible homeowners facing a significant drop in income, making it difficult to meet mortgage payments. The assistance is provided as a loan, and eligibility is determined by income and the value of the home.

3. Lender-Specific Assistance Programs

Financial institutions, including banks and credit unions, often have their own support programs for homeowners in mortgage default:

a. RBC

The Royal Bank of Canada (RBC) offers the Mortgage Repayment Assistance Program (MRAP). This program assists RBC mortgage holders who are experiencing temporary financial difficulties, providing the option to defer or reduce mortgage payments for a specified period.

b. TD Bank

TD Bank provides the TD Helps Mortgage Payment Assistance program. This initiative offers personalized solutions for homeowners facing financial challenges, including mortgage payment deferral or restructuring.

4. Eligibility Criteria and Application Process

Eligibility criteria for these support programs can vary based on factors such as income, employment status, and the reason for mortgage default. Common eligibility requirements include:

  • Proof of financial hardship: Homeowners are often required to provide evidence of their financial difficulties, such as job loss, illness, or other unforeseen circumstances.
  • Proof of homeownership: Applicants must demonstrate ownership of the property and the mortgage in question.
  • Debt-to-income ratio: Lenders and programs may assess the homeowner’s debt-to-income ratio to determine if they qualify for assistance.
  • Application process: Homeowners must typically contact their lender or program administrator to initiate the application process. Documentation such as income statements, bank statements, and hardship letters may be required.

5. Benefits and Limitations

The benefits of seeking financial assistance through these programs are substantial:

  • Avoiding foreclosure: The primary benefit is that homeowners can avoid foreclosure and the subsequent loss of their homes.
  • Temporary relief: Programs like mortgage payment deferral or modification provide temporary financial relief, allowing homeowners to stabilize their financial situation.
  • Preservation of credit score: By preventing foreclosure, homeowners can safeguard their credit scores from the negative impacts of default.

However, there are limitations to consider:

  • Accrued interest: In cases of mortgage payment deferral, the accrued interest is usually added to the outstanding balance, potentially increasing the long-term cost of the mortgage.
  • Temporary solutions: Many assistance programs offer temporary relief, and homeowners must eventually resume full payments.
  • Program availability: Some programs are specific to certain provinces or financial institutions, limiting accessibility for certain homeowners.


For Canadian homeowners facing mortgage default, the availability of various support programs offers a lifeline during challenging times. These programs, offered by both government agencies and financial institutions, aim to prevent foreclosure and provide temporary financial relief.

Homeowners must carefully assess their eligibility, the benefits, and the limitations of each program before applying. By seeking assistance through these initiatives, homeowners can work towards stabilizing their financial situations, preserving their homes, and maintaining their overall financial well-being.

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