Your closing date is set. The movers are booked. Then your lawyer calls and says the mortgage instructions still have not arrived from the lender. You are looking at a delayed closing, per diem interest charges, and possibly a furious seller’s lawyer threatening to terminate the deal.
Late mortgage instructions are one of the most common reasons Ontario real estate closings stumble at the finish line. The lender sends the instructions to the buyer’s lawyer through Telus Assyst Real Estate, FCT, or directly, and the lawyer cannot register the mortgage or release funds until those instructions land. Even a one day delay can cost thousands.
This guide explains what mortgage instructions are, when they should arrive, what happens when they do not, and what you can do to keep your closing on track.
What Are Mortgage Instructions
Mortgage instructions are the formal package the lender sends to the buyer’s lawyer authorizing the lawyer to register the mortgage and receive the mortgage funds. They are the lender’s marching orders for the closing.
A typical mortgage instruction package contains the loan amount and any holdbacks, the interest rate, term, amortization, and payment schedule, the borrower information and required identity verification (FINTRAC), the property description and the legal name the title must read in, conditions of advance (insurance, title insurance, additional borrowers, payouts of existing mortgages), required title insurance coverage and policy details, undertakings the lawyer must give the lender, and the funding method and the date the lender will release funds.
Until the lawyer receives this package and completes every required step, the lender will not advance the funds. No funds means no closing.
In Ontario, mortgages are registered electronically through Teraview at the Land Registry Office under the Land Registration Reform Act. Only a licensed Ontario lawyer can register a mortgage on title. The lawyer registers the charge document and gives the lender an undertaking to deliver the final report after closing.
As Demet Altunbulakli, founding lawyer at Insight Law Professional Corporation, puts it, “Mortgage instructions are the single biggest source of avoidable closing delays I see. When they arrive a week early, closing is calm. When they arrive the morning of closing, the whole file becomes a fire drill.”
How Mortgage Instructions Flow in Ontario
Most major Canadian lenders deliver mortgage instructions to lawyers through one of two electronic platforms.
Telus Assyst Real Estate (ARE). The platform used by RBC, BMO, Scotiabank, CIBC, TD, and most major banks. The lender uploads instructions, the lawyer downloads them, signs the required undertakings electronically, and returns the Solicitor’s Final Report after closing.
FCT (First Canadian Title) Lender Solutions. Used by many credit unions, monoline lenders, and private lenders. Some lenders package title insurance directly with the instruction package.
A smaller number of lenders, particularly private lenders and some commercial deals, still send instructions by direct email or secure portal. Every lender has its own format, undertakings, and approval steps.
The lawyer cannot start substantive work on the mortgage side until the instructions are in hand. Reviewing title, ordering title insurance, preparing the charge, scheduling the signing meeting, and requesting the advance all depend on the instruction package being live.
When Should Mortgage Instructions Arrive
There is no statutory deadline for delivery. Lender service standards generally call for instructions to arrive 5 to 10 business days before closing. The reality on the ground is messier.
Ideal. 7 to 10 business days before closing. The lawyer has time to review the instructions, identify any unusual conditions, schedule the signing meeting, complete identity verification, and address any title or insurance issues without rushing.
Acceptable. 3 to 5 business days before closing. Workable, but the file becomes time sensitive and any complication eats up the buffer fast.
Risky. 1 to 2 business days before closing. Possible to close, but identity verification, signing, fund advance, and registration all need to happen in a compressed window. One missing document or a system outage can push the closing.
Crisis. Day of closing or the day before. Closing may need to be moved or extended. Per diem interest and other costs are likely.
Most Ontario real estate lawyers charge a rush fee (often $300 to $500) when instructions arrive less than 5 business days before closing. The rush fee covers the extra work and overtime needed to pull everything together.
What Happens When Mortgage Instructions Arrive Late
The cascade of problems from late instructions falls into four buckets.
Delayed closing. If the lawyer cannot register the mortgage or receive funds by 5:00 p.m. on the closing date, closing will not happen that day. The lawyers usually attempt an extension, but the seller’s lawyer is under no obligation to agree. Section 4 of the Vendors and Purchasers Act gives the buyer some flexibility if the seller raises title issues, but it does not extend the closing for the buyer’s financing problems.
Per diem interest charges. If the seller agrees to extend, the buyer typically pays per diem interest on the purchase balance for every day of delay. On a $1 million purchase at 5 percent, per diem is roughly $137. A one week delay can mean almost $1,000 out of pocket.
Lost rate hold. Mortgage rate holds expire. If the closing pushes past the rate hold date, the borrower may need to re qualify at current rates, which in a rising rate environment can add thousands to monthly payments over the life of the mortgage.
Termination risk. If the seller refuses to extend and the buyer cannot close, the seller can declare the buyer in breach, keep the deposit, re sell the property, and sue the buyer for the difference if the resale price is lower (plus carrying costs). This was the outcome in many cases during the 2022 market correction in Ontario.
Bridge financing gaps. Buyers who arranged bridge loans (using equity from a property closing the same day) face a chain reaction. A late mortgage instruction on one transaction can collapse two closings.
Common Causes of Late Mortgage Instructions
Lender underwriting backlog. Volume spikes in spring and fall, plus rate change announcements, create backlogs in lender underwriting departments. Files at the back of the queue do not get sent out until the lender clears the front.
Missing borrower documents. The lender has the file, but the underwriter is waiting on an updated employment letter, a pay stub, a Notice of Assessment, or a gift letter. Until those documents arrive, no instructions go out.
Last minute appraisal issues. A low appraisal can mean the loan amount drops, requiring the buyer to make up the difference or re negotiate. The lender holds instructions while this is being resolved.
Identity or fraud verification. With mortgage fraud on the rise, lenders now run additional verification on borrowers and properties. Any flag can hold up instructions while the lender investigates.
Property issues flagged by the lender. Marijuana grow op history, former oil tanks, knob and tube wiring, asbestos, or unconventional construction can trigger lender concerns that delay or kill the file.
Switches and refinances at month end. If you are refinancing or switching lenders, your current mortgage typically gets paid out on your existing payment date. Lenders try to bundle these for efficiency, which creates a month end crunch.
Mortgage broker bottleneck. If you are using a mortgage broker, the broker is the bridge between you, the lender, and the lawyer. A slow or disorganized broker can hold up instructions even when the lender is ready.
Conditions still outstanding. Subject to financing and lender conditions (down payment confirmation, employment verification, property insurance) must all be cleared before the lender will release the instructions.
Comparison of On Time vs Late Instructions
| Aspect | On Time (7+ days) | Late (1 to 3 days) | Day of Closing |
| Lawyer review time | 2 to 3 days, careful review | Hours, rushed | Minimal, high risk |
| Identity verification | Scheduled at convenience | Squeezed in same day | Often impossible to complete |
| Signing meeting | Scheduled 1 to 2 days before closing | Squeezed in same day | Often pushes closing |
| Rush fees | None | $300 to $500 typical | $500 plus, or refusal to close |
| Per diem interest | None | Possible if closing pushes | Almost certain |
| Closing day stress | Calm, methodical | Tense, high stakes | Crisis mode |
| Risk of failed closing | Very low | Moderate | High |
| Effect on rate hold | None | Usually fine | Risk of expiry |
| Buyer cost impact | None | Modest | Significant |
What You Can Do to Prevent Delays
Submit every lender document early. The fastest way to slow down a closing is to delay returning a document the lender requested. Sign and submit pay stubs, NOAs, employment letters, gift letters, and insurance binders the day they are requested.
Confirm closing date with your lender in writing. Have your mortgage broker or lender contact confirm the closing date in writing at least 3 weeks out. This puts the date on the lender’s calendar and gives you a paper trail if instructions are late.
Send your lawyer the Agreement of Purchase and Sale the moment it is firm. Your lawyer cannot prepare anything without the APS, and once it is in hand, the lawyer can open the file, run the title search, and be ready the second instructions arrive.
Send your lawyer the mortgage commitment as soon as you sign it. This gives the lawyer a head start on knowing what to expect and which platform the lender will use.
Get property insurance early. Lenders will not advance funds without proof of property insurance for at least the mortgage amount. Have the property insurance binder in hand and send it to your lawyer 7 to 10 days before closing.
Avoid month end closings if possible. If you can pick a mid month or mid week closing date, lender volume is lower and the risk of last minute backlog is reduced. Avoid Fridays especially. If something goes wrong on a Friday, you may need to wait until Monday to fix it.
Pick a real estate lawyer who handles your specific lender often. Lawyers familiar with each lender’s platform, format, and undertakings can move faster. An experienced real estate lawyer in Toronto has seen every lender’s quirks.
Stay reachable on closing day and the day before. If your lawyer needs a signature, a clarification, or proof of something at the last minute, being reachable can be the difference between closing on time and getting pushed.
Frequently Asked Questions
How early should my lawyer receive my mortgage instructions for a smooth closing?
Ideally 7 to 10 business days before closing. Most Ontario lender service standards call for delivery at least 5 business days before closing. Instructions arriving 3 to 5 business days before closing are workable. Anything less than 3 business days is risky and often triggers a lawyer’s rush fee of $300 to $500.
Can the closing date be extended if mortgage instructions arrive late?
Only if the seller agrees. Section 4 of the Vendors and Purchasers Act gives buyers some flexibility for title problems, but it does not protect a buyer whose lender is slow. Most Ontario Agreements of Purchase and Sale state that “time is of the essence.” If the seller refuses to extend, the buyer can lose the deposit and be sued for damages if a delayed closing collapses the deal.
Who pays the costs of a late closing in Ontario?
The buyer pays. Per diem interest, rush fees, additional legal time, moving rescheduling costs, and bridge loan extensions all fall on the buyer. The lender is not legally liable for slow instructions in a typical residential transaction. If the seller agrees to extend, the buyer usually pays the seller per diem interest on the purchase price for the delay period.
What is a per diem interest charge on a late closing?
Per diem interest is one day’s worth of interest on the unpaid purchase price, paid by the buyer to compensate the seller for the delay. The rate is usually the seller’s mortgage rate or a contractual rate stated in the APS. On a $1 million purchase at a 5 percent rate, per diem is approximately $137 per day.
Can my lawyer ask my lender to send mortgage instructions earlier?
Yes, and a good real estate lawyer often does. The lawyer can email the lender or use the Telus Assyst Real Estate platform to request the instructions ahead of schedule. The lender is not obligated to comply, but a polite, timely follow up often moves a file up in the queue.
What if my closing is delayed because my lender did not send instructions on time?
First, confirm with your lawyer whether the closing can still happen. If not, your lawyer will negotiate an extension with the seller’s lawyer. You will likely pay per diem interest for the delay. If the seller refuses to extend, you may need to apply to court for relief or, in extreme cases, accept that the deal is at risk of termination. This is why having an experienced real estate lawyer in Toronto handling your file matters. Your lawyer’s relationship with the seller’s lawyer often makes the difference between a one day extension and a collapsed deal.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
