When Mortgages Go Wrong: Lessons from a Canadian Homeowner

Welcome to Remortgaging.ca. Every homeowner’s journey is unique, filled with hopes, dreams, and sometimes, unforeseen pitfalls. In this piece, we will recount the story of a Canadian homeowner whose mortgage experience went awry, offering key lessons to help others avoid similar missteps.


The path to homeownership is often seen as a rite of passage. But as Mr. Thompson, a Canadian from Calgary, found out, it’s not always smooth sailing. This is his story — and the lessons we can draw from his experiences.

1. The Dream Begins: Mr. Thompson’s Journey

Like many Canadians, Mr. Thompson’s dream was a house with a white picket fence. In the early 2010s, with a stable job and a growing family, he felt it was time to upgrade from his apartment. Drawn by the allure of low introductory mortgage rates, he hastily secured a deal without fully understanding the fine print.

2. The Adjustable-Rate Mortgage Trap

Mr. Thompson opted for an adjustable-rate mortgage (ARM). Initially, he enjoyed low rates, which gave him the illusion of saving money. However, he hadn’t factored in the volatility of adjustable rates.

Lesson: Always understand the long-term implications of your mortgage type. ARMs can lead to higher payments if rates increase.

3. Overextending Financially

With the attractive initial rates, Mr. Thompson purchased a home at the upper end of his budget. He believed he could manage, expecting regular raises at his job.

Lesson: Budget conservatively. It’s essential to factor in potential economic downturns or personal financial challenges.

4. Missing the Fine Print: Prepayment Penalties

A few years in, Mr. Thompson received an inheritance. Hoping to pay down a chunk of his mortgage, he was shocked to learn his contract had substantial prepayment penalties.

Lesson: Thoroughly review your mortgage agreement. Understand all penalties and restrictions to avoid unpleasant surprises.

5. Refinancing Woes

As interest rates began to rise, Mr. Thompson’s monthly payments ballooned. Desperate, he sought to refinance, only to find out that breaking his mortgage would incur even more penalties.

Lesson: When considering refinancing, weigh the long-term benefits against any immediate costs or penalties.

6. The Property Value Dilemma

When the housing market experienced a slowdown, the value of Mr. Thompson’s home dipped below what he owed on his mortgage. This situation, termed being “underwater” on a mortgage, limited his options.

Lesson: Remember, property values can fluctuate. Ensure you have a buffer in terms of equity and savings.

7. Navigating Financial Strain

Struggling with rising payments, Mr. Thompson faced severe financial strain. He began dipping into his savings, straining his financial security.

Lesson: Always have an emergency fund. It’s vital to maintain some financial flexibility should circumstances change.

8. Seeking Professional Help

Realizing he was in over his head, Mr. Thompson approached a mortgage broker. The broker assisted him in restructuring his mortgage, helping him shift to a fixed-rate mortgage and consolidating his debts.

Lesson: Don’t hesitate to seek expert advice. Professionals can offer solutions you might not have considered.

9. Recovering from Mistakes

With his new mortgage structure and a clear financial plan, Mr. Thompson began rebuilding his financial health. He prioritized creating a savings buffer, chipping away at his debt, and being more cautious with his spending.

Lesson: Everyone can rebound from financial missteps. What’s crucial is learning, adapting, and prioritizing financial health.

10. Sharing the Experience

Determined to prevent others from making the same errors, Mr. Thompson began sharing his story. He became a vocal advocate for financial literacy and education, ensuring that others had the tools to make informed decisions.

Lesson: Sharing our experiences, both good and bad, can be invaluable for others. It fosters a community of informed and proactive homeowners.


While Mr. Thompson’s journey was fraught with challenges, it offers invaluable insights for potential homeowners. As he learned, understanding the intricacies of mortgages, preparing for potential challenges, and being proactive in seeking solutions are all essential.

Stay with Remortgaging.ca for more insights, expert advice, and real stories to guide you through the complex world of Canadian mortgages. Together, we’ll navigate the path to homeownership, armed with knowledge and confidence.

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