Falling Behind on Mortgage Payments? How Refinance Rent-to-Own Can Help

You bought your home. You did everything you were supposed to do. And now — because of a job change, a rate increase, an unexpected expense, or a private mortgage that was only meant to be temporary — you're falling behind.

The calls from the lender are getting more frequent. The late fees are piling up. You're lying awake at night wondering if you're about to lose the home your family lives in.

If this sounds familiar, you need to know two things. First, you're not alone — unfortunately, thousands of Canadian homeowners are in this exact situation right now. Second, there may be a way out that lets you keep your home, reset your payments, and start over on solid ground.

It's called Refinance Rent-to-Own, and it was designed specifically for situations like yours.

What Is Refinance Rent-to-Own?

Refinance Rent-to-Own is a program for homeowners who are struggling with their current mortgage payments — whether that's a bank mortgage that's become unaffordable after renewal, a B-lender mortgage with punishing rates, or a private mortgage that was always meant to be a short-term bridge but has turned into a trap.

Here's how it works in plain language:

We buy your home from you. This pays off your existing mortgage (or mortgages), clears your arrears, and gets the lender off your back.

You stay in your home. Nothing changes for your family's daily life. Same house, same neighbourhood, same school for the kids.

Your payments reset. Instead of whatever unsustainable payment you're currently making, your new monthly payment is based on an A-lender mortgage rate — which in most cases is significantly lower than what you're paying now.

You buy your home back. At the end of a 3 or 4-year term, you repurchase the home. By then, you've had time to rebuild your credit, stabilize your finances, and qualify for a traditional mortgage on your own terms.

Think of it as pressing the financial reset button — without losing your home.

Who Is This For?

Refinance Rent-to-Own is built for homeowners who are in a tough spot financially but still have equity in their home. Specifically, it works if:

That last point is important. The 10% equity is what makes the program work — it ensures there's enough room to structure the deal in a way that benefits everyone, especially you.

How Do I Know If I Have 10% Equity?

Here's a quick way to estimate.

Take the current market value of your home. Subtract everything that's owed against it — your first mortgage balance, any second mortgage, any home equity line of credit (HELOC), and any liens.

If the remaining amount is at least 10% of the home's value, you could likely qualify.

Example:

In this case, there's $80,000 in equity — that's 13.3%, which clears the 10% threshold. This homeowner would be a strong candidate for Refinance Rent-to-Own.

If you're not sure what your home is worth or what your exact balances are, that's okay. We can advise you on you can figure it out during the pre-qualification process.

A Real-World Scenario: The Marshall’s

Let's walk through how this would work for a family we'll call the Marshall’s. (This is a composite example based on real situations we've seen.)

The Problem

The Marshall’ bought their home in Brampton for $620,000 three years ago. At the time, they couldn't qualify with a big bank, so they went through a B-lender with a 2-year term at 7.2%.

When the term came up for renewal, their credit hadn't improved enough to switch to an A-lender. They renewed with the same B-lender — but at 8.5%. Their monthly payment jumped from $3,400 to $3,900.

Then Mr. Marshall had his hours cut at work. They started missing payments. The lender added late fees. Their credit scores dropped further. Now they're two months behind, the lender is threatening power of sale, and they feel like the walls are closing in.

Their Financial Snapshot

What Refinance Rent-to-Own Does for Them

Step 1: We purchase the home for $640,000. This pays off the $557,000 in mortgages and arrears. The Marshall’s receive the difference as their initial equity credit — approximately $83,000 (minus transaction costs, approximately $65,000 net credit toward their future down payment). The 10% equity is redirected back to the investor helping them at closing and it becomes their down payment in the program that they get back when they purchase the house at the end of the rent-to-own term.

Step 2: The Marshall’s stay in the home. They sign a rent-to-own agreement with a locked-in future purchase price.

Step 3: Their payments reset. Because the underlying mortgage is now held at A-lender rates, the Marshall's new monthly payment drops.

That $500/month in breathing room changes everything. It's the difference between drowning and getting your head above water.

Step 4: They rebuild. Over the next 3–4 years, the Marshall’s use the stability and lower payments to rebuild their credit by making consistent, on-time payments, pay down other debts that were dragging their scores down, save additional funds toward their eventual down payment, and get mortgage-ready with a clean financial profile.

Step 5: They buy their home back. At the end of the term, the Marshall’s repurchase the home at the pre-agreed price. Their down payment consists of the equity credit from the original sale plus any additional monthly credits earned during the term. With improved credit and stable income, they qualify for a traditional A-lender mortgage — the kind they couldn't get before.

They kept their home. They cleared their debt. They rebuilt their credit. And now they're a homeowner again — on solid footing this time.

How Payments Become More Affordable

The single biggest factor that makes Refinance Rent-to-Own work is the interest rate reset.

Many families in financial trouble are paying inflated rates — sometimes dramatically inflated — because they're with B-lenders or private lenders who charge a premium for higher-risk borrowers.

Here's how the rate difference impacts monthly payments on a $550,000 mortgage:

The difference between an A-lender rate and a private mortgage rate can be $1,400 to $2,300 per month on the same balance. That's not a small adjustment — it's life-changing.

Refinance Rent-to-Own brings your effective housing cost back down to A-lender territory, even if your credit isn't there yet.

What You Need to Qualify

The requirements are straightforward:

That's it. We don't need a perfect credit score. We don't need two years of flawless payment history. We need equity, income, and commitment.

Common Questions Families Ask

"Will I lose ownership of my home?"

Technically, yes — during the rent-to-own term, we hold title to the property. But practically, nothing changes. You live in the home, you maintain it, you treat it as yours. And at the end of the term, you buy it back and the title returns to you. Think of it as temporarily handing the keys to someone who gives them right back once you're back on your feet.

"What happens to my existing mortgage?"

It gets paid off in full when we purchase the home. That includes the principal balance, any arrears, and any penalties. The lender is made whole, and you start clean.

"Will this hurt my credit?"

Your credit has likely already been impacted by missed payments. Refinance Rent-to-Own stops the bleeding. Once you're in the program and making consistent on-time payments, your credit begins to recover. Most participants see meaningful credit improvement within 18-24 months.

"What if I can't qualify for a mortgage at the end of the term?"

We build the term length — typically 3 or 4 years — around what's realistic for your situation. We also work with you throughout the process, not just at the end. If you're on track with payments and credit rebuilding, qualification at the end of the term is the expected outcome, not a surprise test.

"Is this the same as power of sale?"

Not even close. Power of sale means the lender sells your home, often below market value, and you lose everything. Refinance Rent-to-Own means you sell to us at fair market value, keep your equity, stay in the home, and buy it back when you're ready. It's the opposite of losing your home — it's a strategy for keeping it.

"Can I do this if I have a private mortgage?"

Absolutely. In fact, homeowners trapped in high-interest private mortgages are one of the most common situations we help with. The rate reduction alone can free up hundreds or even thousands of dollars per month.

The Alternative: What Happens If You Do Nothing

We understand the instinct to put your head down and hope things get better on their own. But when you're behind on mortgage payments, the math works against you fast.

Missed payments trigger late fees. Those fees get added to your balance. Now you owe more.

Your credit score drops. Each missed payment is reported to the credit bureaus. Within a few months, your score can drop 100+ points.

Refinancing becomes impossible. With a lower credit score and missed payments on your record, no A-lender will touch you. B-lenders might — but at even higher rates. Private lenders will, but the rates could make things worse.

The lender initiates power of sale. In Ontario, this process can begin after as few as 15 days of default. Once it starts, you're on the clock.

You lose your home and your equity. In a power of sale, the lender's priority is recovering their loan — not maximizing the sale price. Homes sold through power of sale often go for 10–20% below market value. Whatever equity you had can evaporate.

Refinance Rent-to-Own is designed to interrupt this spiral before it reaches that point.

When to Reach Out

The best time to explore Refinance Rent-to-Own is before things reach a crisis. If any of these describe your situation, it's worth a conversation:

You don't need to have all the answers before reaching out. You just need to make the call.

The Bottom Line

Falling behind on mortgage payments doesn't mean you've failed. Life is unpredictable, rates have risen sharply, and the system isn't set up to give you a second chance through traditional channels.

Refinance Rent-to-Own is that second chance.

It lets you pay off your existing mortgage, stay in your home, reset your payments to something sustainable, and rebuild your financial foundation — so you can buy your home back in 3–4 years as a stronger, more qualified borrower.

You worked hard to get into your home. You shouldn't have to lose it because the system wasn't designed to help you when things got tough.

> If you're falling behind on mortgage payments and you have equity in your home, Refinance Rent-to-Own may be the path that lets you keep what you've built — and come back stronger.

Think Refinance Rent-to-Own might work for your situation? Visit our pre-qualification page to find out if you have enough equity to qualify — it takes just a few minutes, and there's zero obligation.