Losing an Income: How Long Could You Carry the House? (2026)
Divide liquid savings by the monthly shortfall to find your runway. A worked example, what lenders will and won’t do, and moves that stretch your months.
Divide liquid savings by the monthly shortfall. A household paying $3,591 on the mortgage and $1,000 for tax, insurance and utilities, with $25,000 in savings and one remaining income of $4,200 net, has a shortfall of about $3,900 a month once groceries and everything else are counted, a runway of roughly six months. Lenders will not lower the interest rate, but most will offer a payment deferral, an amortization extension or an interest-only period on request, each of which adds cost later. The decision that protects the most equity is usually made by month three, not month six.
Figures come from the CostToClose mortgage payment calculator.
The runway calculation
| Item | Monthly |
|---|---|
| Mortgage payment ($649,530 at 4.49%) | $3,591 |
| Property tax, insurance, utilities | $1,000 |
| Groceries, transport, phone, insurance, minimum debt payments | $2,900 |
| Child care, other fixed | $600 |
| Outflow | $8,091 |
| Remaining net income | $4,200 |
| Employment insurance (if eligible; up to 55% of insurable earnings, max ≈ $695/week) | ≈ $2,700 |
| Shortfall | ≈ $1,190/mo with EI; ≈ $3,890/mo without |
| Savings | $25,000 |
| Runway | ≈ 21 months with EI; ≈ 6 months without |
Figures computed using the CostToClose calculator, 14 September 2026. EI makes the difference between a manageable gap and an emergency; apply the week the job ends.
What the lender can do
| Option | What it is | Cost |
|---|---|---|
| Payment deferral | Skip one to several payments; interest accrues and is added to the balance | Interest on the deferred amount for the rest of the amortization; ≈ $200 of extra interest per $3,591 skipped, compounding |
| Amortization extension | Re-amortize to 30 or 35 years | Lower payment (≈ $3,271 at 30 years); tens of thousands more lifetime interest |
| Interest-only period | Pay interest only (≈ $2,408) for 6 to 12 months | No principal reduction; some lenders charge a fee |
| Capitalizing arrears | Add missed payments to the balance and reset | Larger balance, sometimes a new term |
| Switch to variable or shorter term | Only at renewal | Depends on rates |
Federally regulated lenders are expected under the FCAC's mortgage relief guideline and the Canadian Mortgage Charter to offer relief to borrowers in financial difficulty, including waived fees on the relief measure itself and no interest charged on interest added to the balance — see our Canadian Mortgage Charter & FCAC guideline guide for the full list of what you can ask for by name. Ask before missing a payment, not after. Mortgage default insurance does not pay your mortgage; if you bought optional mortgage disability or job-loss insurance, claim it now.
When selling beats holding on
Every month of carrying costs $8,000 of outflow; every month of a forced sale after arrears costs more. If the second income is unlikely to return within the runway, listing at month two or three while you can still afford to wait for a fair price usually preserves more equity than exhausting savings and selling under pressure at month six. On a $700,000 home with a $640,000 balance, selling costs consume most of the equity (see Cost of selling a house), but arrears and a power of sale consume all of it.
Worked example from the calculator
Household above, without EI eligibility, chooses a six-month interest-only period:
| Item | Amount |
|---|---|
| Payment reduced to interest only | $2,408 (saves $1,183/mo) |
| Shortfall | ≈ $2,708/mo |
| Runway on $25,000 | ≈ 9 months instead of 6 |
| Principal not paid over 6 months | ≈ $7,170, added to the amortization |
Three extra months to find work, at a cost of about $7,170 of equity plus the interest on it. Reproduce this.
Frequently asked questions
Can I defer my mortgage payments if I lose my job?
Most lenders will defer one or more payments on request. Interest still accrues and is added to the balance; it is not free.
Does mortgage insurance cover job loss?
Mortgage default insurance (CMHC) protects the lender, not you. Optional mortgage job-loss or disability insurance sold with the mortgage may pay for a limited period if you bought it.
How long can I miss mortgage payments before foreclosure?
Lenders typically begin default proceedings after two to three missed payments; the process takes months in most provinces. Contact the lender before the first missed payment.
Should I sell my house if I lose my job?
If the income is unlikely to return within your savings runway, an early orderly sale usually preserves more equity than a late forced one. Compute the runway first.
Will a payment deferral hurt my credit?
An agreed deferral generally does not; missed payments without an agreement do.
Sources
- Financial Consumer Agency of Canada, guideline on mortgage relief for consumers in financial difficulty — checked 14 Sept 2026
- Employment and Social Development Canada, EI regular benefits (maximum weekly amount 2026) — checked 14 Sept 2026
- CMHC, what mortgage loan insurance covers — checked 14 Sept 2026
This guide is general information for Canadian home buyers and sellers, checked against the sources listed above on the date shown. It is not legal, tax, or mortgage advice. Rules and rates change; confirm current figures with your lawyer or notary, your lender, or the government office that administers the tax before relying on them.