Falling behind on your income tax


Falling behind on income tax can impact your ability to get a mortgage or the best mortgage rates in Ottawa. Most lenders will need to you have your income taxes up to date before being able to obtain a new mortgage whether on a purchase, port or refinance.  With a CRA threat of freezing bank accounts or garnishing wages, this can be a very frightening time. Fortunately for those with equity in their home there are options.  The options are refinancing or exploring options with a private mortgage from a private lender in Ottawa. 


Options for those behind on income tax




Refinance your mortgage to up 80% or 85% of the value of the property and use the additional funds to pay off the tax owing with the refinance. Your mortgage and CRA debt can be consolidated into one mortgage and one payment.  You can set the amortization to an amount of years that works best with your goals and cash flow. Amortizations up to 40 years are still available.


Private mortgage


Add a private mortgage behind your existing mortgage up to 80% to 85% of the value of the property.

With a private mortgage option your can keep you first mortgage as is.  It will remain at the current rate, and the private mortgage will be in its own mortgage component.  With this, you can focus on paying the new mortgage off at your earliest convenience.  Also, there would be no penalty to break your current mortgage. The private mortgage can be interest only and you can make principal payments as you wish.


Some additional information on late CRA payments


Interest charged

If you have a 2017 balance owing from falling behind on your income tax, they charge interest.  Plus the interest is compounded daily, beginning May 1, 2018 on any amounts that are unpaid for 2017.  This also includes any balances owing from a reassessment. They can change the rate of interest that they charge every three months.

Late filing

If you file your return for 2017 after the deadline and you have tax owning, there is a penalty for late filing.  The penalty is 5% of your 2017 amount owing. In addition to this they charge you 1% of the balance owed for every month you are late up to 12 months. 

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About Andrew Thake

Andrew Thake is a seasoned mortgage broker with over 15 years of industry experience. He’s assisted more than 2,200 clients in finding their ideal mortgage solutions. Recognized for his excellence, Andrew has received high honours and awards, including the National Rookie of the Year from TD Canada Trust and recognition as a Top 10 Ottawa Mortgage Broker in 2023. He has also been inducted into the Hall of Fame at Dominion Lending Centres and has consistently received their Platinum Award during his tenure as a mortgage broker.

Andrew’s dedication lies in serving his clients and prioritizing their needs with an empathetic approach. Throughout the application process, he provides tailored, informed, and efficient services to ensure the best mortgage solutions for his client’s unique circumstances. The best part of Andrew’s job is when he gets to see the joy on his clients’ faces following their mortgage approval.

Why not make your mortgage experience a comfortable one?

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