Legal Blog

Interest Act & Increased Interest Rate

Alleghe Mortgage Fund Ltd. v. 1988758 Ontario Inc.  2021 Ont SCJ

Section 8 of the Mortgages Act proscribes an increased interest rate on arrears beyond the rate set out when the mortgage is not in arrears. An interest rate that increases during the term (e.g. the 12^th month of a one year mortgage) does not run afoul of this section. The interest rate is increasing solely as a result of the passage of time and while the mortgage is still in good standing.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.