Power of sale in Ontario: what it means and what to do

Power of sale lets your mortgage lender sell your home to recover what you owe after you default, without going to court first for permission to sell. It's the standard route lenders use in Ontario. Foreclosure is a separate, court-supervised process where the lender ends up owning the property outright instead of selling it, and any equity you had is generally lost. Foreclosure is rare in Ontario: power of sale is faster for the lender and, unlike foreclosure, any surplus after the sale still comes back to you.

Under the Mortgages Act, a lender can't issue a Notice of Sale until you've been in default for at least 15 days. Once that notice is given, the property can't be sold for at least 35 days. If you're married and it's your matrimonial home, your spouse is entitled to the same notice, even if they aren't on title. Until the property is actually sold, the Mortgages Act lets you put the mortgage back in good standing by paying the missed amounts plus the lender's expenses, even if the mortgage says the whole balance is now due. If the lender has also started a court action, you need the court's help to do that.

• Bring the mortgage back into good standing by paying the arrears, interest, and the lender's costs before the property is sold.
• Refinance with your existing lender or a new one, if you still have enough equity and income to qualify.
• List and sell the property yourself before the lender does, which usually gets a better price than a power of sale listing.
• Talk to your lawyer as soon as you miss a payment. See our page on refinancing if that's realistic for you.

Yes. The lender has a legal duty to act in good faith and take reasonable steps to get fair market value when selling, not just whatever offer comes in fastest. After the mortgage balance, legal costs, and other registered debts are paid, any money left over is surplus and belongs to you, the former owner, not the lender. If you're buying a power of sale property, expect it sold as-is, with far fewer seller promises about condition. The lender's own agreement schedule typically limits what you can rely on. Vacant possession isn't guaranteed, and sometimes the previous owner or tenants are still there when the deal closes. Because of the limited disclosure, title insurance and a thorough title search from your lawyer matter more here than in a typical purchase.