Is Your Income at Risk? Your Home Doesn't have to be

February 16, 2012 - Updated: March 12, 2015

Sometimes, life can deal you an unexpected blow that ends up seriously hurting your finances - and preventing you from making your mortgage payments. These unexpected circumstances can include a death in the family, a prolonged illness or the loss of a job.

Almost half of Canadian homeowners have mortgage default insurance, which is mandatory to get a mortgage if you only put a small downpayment on your home. Most homeowners don't realize, however, that having mortgage insurance often gives them access to quite a few programs and options that can help them if they run into payment difficulties.

Some of these options and programs to assist homeowners with mortgage payments include:


Increasing your amortization period

Increasing your amortization period (the length of time, in years, that your mortgage is for) can result in smaller monthly mortgage payments - making it easier for you to keep paying your mortgage on time. However, you will end up paying your mortgage for longer and pay more interest, so this should be a short-term solution. Another way to have smaller monthly payments is to shop around for a new lender or renegotiate your mortgage at a lower rate.


Deferring your mortgage payments

Deferring a mortgage payment is essentially skipping a mortgage payment. There are usually restrictions on deferring a payment - you can only do it once a year or a certain number of times during the life of your mortgage, for example - but it can be a viable option if you need to get ahead. To defer a mortgage payment, your mortgage (and all the debt you have with that particular lender) must usually be in perfect standing with on-time payments, so if this is an option you want to consider, make arrangements to do so as soon as you know you're in trouble.


Other arrangements

Your lender or insurance company may be able to work with you in ways not listed above, such as arranging partial payments (instead of your full payment) or coming up with another short- or long-term way to still pay your mortgage.


If you're faced with an unexpected or tragic situation that affects your ability to make your mortgage payments - stay calm. You do have options, just speak with your mortgage lender and insurance company as soon as you can.

Tagged with: mortgage payments insurance homeowners article
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