In Ontario, a lender can issue a Notice of Sale as soon as 15 days after you fall behind on your mortgage. Fifteen days. Most homeowners are still waiting for their bank to return a call when that envelope lands.
Power of sale and foreclosure are two different legal routes a lender can take to force the sale of your home after a default. Power of sale lets the lender sell the property without a judge running the process, and any money left over after the debt and costs belongs to you. Foreclosure goes through the courts, and the lender can end up owning the home outright. Which one applies to you depends mostly on the province you live in.
Below is how each process works, how long the clock actually runs where you live, and what you can still do while it runs. If you have only missed a payment or two and no notice has arrived yet, start with our guide on what to do when you fall behind on mortgage payments. This is general information about how these processes work, not legal advice for your file.
Power of sale and foreclosure are not the same thing
People use the two words as if they mean one thing. They do not, and the difference decides who ends up holding your equity.
In a power of sale, the lender sells the property under the authority written into your mortgage and provincial statute. No judge manages the sale. Title stays in your name until the sale closes. Fair market value has to be the genuine target, and the balance owing, the arrears, the interest and the legal costs all come off the top first. Whatever is left comes back to you.
Under a foreclosure, your lender files a court action. The court issues an order (in British Columbia it is called an order nisi) that sets out exactly what you owe and how long you have to pay it. Fail to pay inside that window and the lender can ask for an order absolute, which transfers title outright, or request a court supervised sale instead.
Why Ontario lenders almost always choose power of sale
It is faster and it costs them less. Ontario's Mortgages Act gives lenders a statutory power of sale on top of whatever the mortgage contract says, so there is no reason to pay for a court file. That speed cuts both ways for you. You get less time, but you also keep the right to any surplus, which a homeowner who loses title through an order absolute does not.
One quirk worth knowing: in several provinces, a lender that takes title through an order absolute gives up the right to chase you for a shortfall. A lender that sells under power of sale can still sue you for the gap.
| Question | Power of sale | Foreclosure |
|---|---|---|
| Is a judge involved? | Not for the sale itself | Yes, start to finish |
| Who sells the home? | The lender, on the open market | The court approves the sale, or the lender takes title |
| Who keeps money above the debt? | You do | You do in a judicial sale, nobody does after an order absolute |
| Typical speed | Weeks to a few months | Six months or longer |
| Can the lender sue for a shortfall? | Usually yes, after the sale | Often not, if it took title |
So the province you bought in shapes your risk more than the size of your arrears does. Real equity tends to survive better under power of sale, because the surplus is legally yours. Own no equity, and a foreclosure can end the debt along with the house. Geography decides more here than most homeowners expect.
The default clock, province by province
Every province gives you a window to fix the default. What changes is who starts the clock, how long it runs, and whether a judge is watching it.
The four stages of the default clock
- Missed payments and a demand letter. No court, no registration. This is the cheapest stage to solve and the one most people sit through.
- Formal notice or court petition. Your lender registers a notice or files with the court. Legal costs start attaching to your payout figure here.
- The redemption period. Your window to pay everything owing and reinstate. It has a hard end date.
- Sale, possession and any shortfall. Your home is listed or transferred, and the lender can pursue the gap if the sale did not cover the debt.
Ontario, New Brunswick, Newfoundland and Labrador, PEI
This is power of sale country. In Ontario the lender waits at least 15 days after default, then serves and registers a Notice of Sale Under Mortgage. That opens a redemption period of roughly 35 days, and it runs longer in some situations, including where a spouse occupies the home. Clear what is owed inside that window, legal costs included, and the mortgage goes back to normal. Miss it and the lender can list the property and go to court for possession.
Quebec
Quebec runs on civil law, so nothing here is called foreclosure. Instead, a prior notice of exercise of a hypothecary right gets registered against your title. Under the Civil Code of Québec, that notice gives you 60 days on a residential immovable to remedy the default or surrender the property. After that the lender can pursue sale by the creditor, sale under judicial authority, or taking the property in payment.
British Columbia, Alberta and the Prairie provinces
Court territory. Your lender files a petition, you get a short window to respond, and at the first hearing the court grants an order nisi setting the redemption amount and the deadline. In British Columbia that period is commonly about six months, though a judge can shorten it when there is little equity to protect. Alberta works the same way through its own statute, with the court free to adjust the timeline. Manitoba, Saskatchewan and Nova Scotia also run through the courts.
| Province | Main remedy | What starts the clock | Typical window |
|---|---|---|---|
| Ontario | Power of sale | Notice of Sale, 15+ days after default | About 35 days |
| Quebec | Hypothecary recourse | Prior notice registered on title | 60 days |
| British Columbia | Judicial foreclosure | Petition, then order nisi | About 6 months |
| Alberta | Judicial foreclosure | Court order | Around 6 months, court set |
| NB, NL, PEI | Power of sale | Notice under the mortgage | Weeks, per notice terms |
Two months in Montreal, six in Vancouver, five weeks in Oshawa. Same missed payment, three different amounts of room to work with.
Four ways to stop the clock before the sale
A redemption period is not a countdown to losing the house. It is the last stretch of road where you still control the outcome, and four exits run off it.
1. Reinstate the mortgage
Pay the arrears, the accrued interest and the lender's legal costs inside the redemption window and the mortgage goes back to normal. A properly tendered redemption cannot be refused. Ask for the payout figure in writing, because the number moves every week that legal work continues.
2. Refinance, or register a second mortgage behind the first
Banks do not refinance a mortgage that is sitting in active default. That is the wall most homeowners hit, and it is where private lending exists. A private mortgage is underwritten mainly on the equity in the property and the strength of the exit plan, not on a credit score that already shows missed payments. For approved files, money can move in days rather than weeks. Our application process sets out what that actually involves.
Two things to keep straight. A second mortgage behind your existing lender often clears the arrears without disturbing a good first mortgage rate, and our comparison of a second mortgage against a HELOC shows when each one fits. Private financing is also short term by design. Write the exit strategy down before you sign, rather than improvising it twelve months later.
3. Sell on your own terms
If the numbers no longer work, a normal listing almost always beats a forced sale. You choose the agent, the price and the closing date, and you keep the equity that a rushed sale plus legal costs would have eaten. Homeowners often decide this three weeks too late.
4. Ask your lender for an arrangement
Insured borrowers sometimes have more room than they expect. CMHC allows lenders to use default management tools on insured files, including payment deferrals and term extensions. The Financial Consumer Agency of Canada sets out what your lender has to tell you. Get any arrangement in writing before you rely on it.
Here is the shape of a file we see constantly. A drywall contractor outside Barrie has a general contractor go quiet on two invoices. He misses a mortgage payment in March, misses another in April, and a Notice of Sale arrives in May with a 35 day clock on it. His bank will not touch him because the file now shows a default. A second mortgage clears the arrears and the legal costs in week two, the invoices land in July, and he refinances back to an A lender the following spring.
Honestly, the worst move is waiting out the redemption period while hoping the bank reconsiders. It almost never does, and every week of waiting costs you options and money. Call somebody in week one, not week four.
What quietly drains your equity while you wait
The house is rarely the first thing you lose. The equity goes first, in pieces, and most of it goes while nothing appears to be happening.
Legal costs attach to your payout and grow with every step the lender's lawyer takes. Interest often jumps to the default rate written in your mortgage. A property sold under pressure tends to fetch less than the same property listed calmly in spring. Second mortgage pricing gets worse the closer you are to a sale date, because the lender is pricing the risk you might not close in time. Then there is the credit damage, which follows you into your next renewal, and the shortfall claim if the sale does not cover the debt.
One thing to refuse outright
If anyone offers to "rescue" your equity by having you sign the title over to them, walk away and talk to a lawyer. Legitimate financing puts a charge on your property. It does not take your name off it.
Solid Capital is a Canadian alternative lender working with homeowners and business owners the big banks decline or under-serve. We read the whole file, the equity, the property, the reason the default happened and the plan to get out of it, instead of stopping at a credit score. Start an application at solidcapital.ca. It takes about five minutes, there is no impact to your credit to apply, and a Canadian advisor reviews every file personally.
A Notice of Sale is a deadline, not a verdict. Homeowners who act in the first week usually keep their equity, and often the house. The ones who lose both are almost always the ones who waited for someone else to fix it. The clock is not your enemy. Silence is.
Frequently Asked Questions
Is power of sale the same as foreclosure in Canada?
No. In a power of sale, your lender sells the home without a court managing the process, and any surplus after the debt and costs goes back to you. Foreclosure is a court process that can transfer ownership of the home to the lender. Which one applies depends on your province and the terms of your mortgage.
Which Canadian provinces use power of sale and which use foreclosure?
Ontario, New Brunswick, Newfoundland and Labrador, and Prince Edward Island rely mainly on power of sale. British Columbia, Alberta, Saskatchewan, Manitoba and Nova Scotia run through the courts. Quebec uses hypothecary recourses under the Civil Code of Quebec, which work differently again. Your province sets the timeline, not your lender.
How long do you have to stop a power of sale in Ontario?
An Ontario lender must wait at least 15 days after default before issuing a Notice of Sale, and the notice then opens a redemption period of roughly 35 days. That period runs longer in some situations, including where a spouse occupies the home. Bringing the account current inside that window, the lender's legal costs included, reinstates the mortgage.
Can you refinance a mortgage that is already in default?
Banks generally will not, because the default is already reported. Private and alternative lenders can, because they underwrite on the equity in the property and the strength of your exit plan rather than on the credit score alone. Approval is never automatic, but a file with real equity and a clear repayment plan is often workable.
Do you get any money back if your home is sold under power of sale?
Yes, if the sale price covers the mortgage balance, arrears, interest and the lender's costs, the surplus belongs to you. The lender must make a genuine effort to sell at fair market value. If the sale falls short of the debt, the lender can usually sue you for the difference.
Does a power of sale or foreclosure damage your credit?
Both leave a serious mark on your credit report, and the missed payments that came first already did damage before any notice arrived. Reinstating the mortgage or refinancing before the sale limits how deep that damage goes. Lenders reviewing you later care about how the file ended, not only that it happened.
