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Job Loss and Mortgage

Job Loss and Mortgage

Life event3 min readFebruary 11, 2026
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Job loss is one of the most stressful life events for a homeowner with a mortgage in Quebec. In this situation, it is essential to act quickly and know the available options to avoid payment default. The first step is to contact your lender as soon as possible. Canadian financial institutions, regulated by the Office of the Superintendent of Financial Institutions (OSFI), are required to treat borrowers in difficulty fairly. Several options may be offered: temporary payment deferral (moratorium), loan modification, switching to interest-only payments for a limited period, or extending the amortization to reduce monthly payments. In Quebec, the fédéral government's Employment Insurance program provides partial income replacement of up to 55% of insurable earnings, with a maximum of $668 per week in 2025. Some mortgage insurance policies include job loss protection that can cover payments for a set period, typically 12 to 24 months. Mortgage brokers play a crucial role in helping their clients negotiate with the lender and explore all available avenues, including potential refinancing if the financial situation allows.

Job Loss: Acting Quickly to Protect Your Property

Losing your job when you have a mortgage can feel overwhelming, but there are concrete solutions in Quebec to help you through this difficult period. The key is not to wait: every day counts when it comes to preserving your credit file and maintaining your relationship with your lender. Financial institutions far prefer working with a proactive borrower rather than having to manage a payment default, which is costly for both parties.

Communicating With Your Lender: Your First Step

Major Canadian banks and alternative lenders have specialized departments for supporting borrowers in difficulty. The Office of the Superintendent of Financial Institutions (OSFI) requires federally regulated financial institutions to have fair borrower treatment policies. Contact your lender as soon as you learn of your job loss, even if your next payment is not yet due. Explain your situation honestly and ask what options are available.

  1. Assess your financial situation: Take stock of your savings, other income, and essential expenses to déterminé how long you can maintain your payments.
  2. Communicate with your lender: Call your financial institution's borrower services department and explain your situation. Ask what accommodation measures are offered.
  3. Check your insurance: Review your mortgage insurance policy to verify whether it includes job loss protection. File a claim within the required deadlines.
  4. Apply for Employment Insurance: Submit your application online through the Service Canada website as soon as possible. There is a one-week waiting period before benefits begin.
  5. Consult a mortgage broker: A broker can negotiate with your lender on your behalf and explore available restructuring or refinancing options.

Options Offered by Lenders

  • Payment deferral (moratorium): temporary suspension of payments for one to six months, with interest accumulation
  • Interest-only payments: temporary reduction of payments by paying only interest, without principal repayment
  • Amortization extension: spreading the balance over a longer period to reduce monthly payments
  • Rate modification: in some cases, the lender may offer a temporarily reduced rate
  • Refinancing: if you have sufficient equity, refinancing can consolidate your debts and reduce your overall payments

Assistance Programs and Resources in Quebec

In addition to fédéral Employment Insurance, Quebec offers certain resources for homeowners in financial difficulty. The Associations cooperatives d'economie familiale (ACEF) offer free budget consultations and can help negotiate with creditors. Quebec's legal aid program can provide legal assistance to eligible individuals facing mortgage foreclosure. Finally, licensed insolvency trustees can explain options such as a consumer proposal, which allows you to restructure your debts while keeping your property. Your mortgage broker remains a valuable ally: they know the internal policies of different lenders and can identify the solution best suited to your situation.

Frequently Asked Questions

What should I do first if I lose my job and have a mortgage?
Contact your lender immediately, even before missing a payment. Financial institutions generally offer temporary solutions to good-faith borrowers who communicate proactively. Also apply for Employment Insurance as soon as possible to maintain replacement income.
Can my lender defer my mortgage payments?
Yes, most Canadian lenders offer temporary deferral programs (moratorium) ranging from one to six months. Interest continues to accrue during the deferral and is added to the loan balance. Conditions vary by lender and your payment history.
Does Employment Insurance cover my mortgage payments?
Employment Insurance does not directly cover mortgage payments, but it provides replacement income of up to 55% of your insurable earnings (maximum $668 per week in 2025). This amount can help cover some of your obligations, but it is rarely enough on its own to maintain all your payments.
Does my mortgage insurance cover job loss?
Some mortgage insurance policies offer optional protection against involuntary job loss. This coverage typically takes effect after a waiting period of 30 to 90 days and can pay your monthly payments for 12 to 24 months. Check your policy conditions, as exclusions are common, particularly for self-employed individuals or terminations for cause.
Can I refinance my mortgage after a job loss?
Refinancing is more difficult without employment, as lenders assess repayment capacity using debt service ratios (GDS and TDS). If you have a spouse with sufficient income or other stable income sources, refinancing may be possible. A mortgage broker can evaluate your options based on your complete situation.

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Educational information only. This does not constitute financial advice under the Act Respecting the Distribution of Financial Products and Services (LDPSF). Consult an AMF-certified mortgage broker before making any financial decision.

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