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ARTICLE · 10 MAY 2023

I'm A Lender! How Do I Get My 3-month Interest Penalty On A Borrower Default?

Gardiner Roberts LLP
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Under Section 17 of the Mortgages Act, R.S.O. 1990, despite any pre-existing mortgage agreement, where a borrower is in default for payment of principal money secured by a mortgage...

CanadaFinance and Banking
Zev Zlotnick
Zev Zlotnick
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Under Section 17 of the Mortgages Act, R.S.O. 1990, despite any pre-existing mortgage agreement, where a borrower is in default for payment of principal money secured by a mortgage, the borrower in default is entitled to three months' notice to arrange for repayment of principal or payment of the principal amount owing with an additional three months' interest.

Subject to the wording in the original mortgage commitment/agreement, lenders will often charge a three month interest penalty if they have to enforce the mortgage via power of sale proceedings or if the borrower neglected to renew the mortgage once the term had expired and they failed to repay the mortgage loan at that time.

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