Power of Sale: What Happens When You Fall Behind on a Mortgage

When a borrower defaults on a mortgage in Ontario, lenders usually use power of sale under the Mortgages Act and the mortgage terms, rather than foreclosure.

The timeline

1. Default: a missed payment or another breach.
2. After at least 15 days of default, the lender can send a notice of sale.
3. You have at least 35 days after the notice to redeem (pay the arrears and costs, or the full amount, depending on the mortgage).
4. The lender can then list and sell the property.

Stopping a power of sale

• Pay the arrears and costs within the notice period, where the mortgage allows.
• Refinance with another lender.
• Sell the property yourself, often for a better price.
• Negotiate a payment plan with the lender.

After the sale

• The lender must try to get a fair price.
• Money left over after the mortgage and costs goes to other creditors and then to you.
• If the sale doesn't cover the debt, you may still owe the shortfall.

Get help early

A real estate lawyer or a non-profit credit counsellor can explain your options.

Sources

• Mortgages Act (Ontario)

Read next: When a Home Buyer Backs Out: Deposits and Damages

General Ontario legal information, not legal advice for your matter, and reading it does not create a retainer. Sources checked 16 October 2026: check the current law, forms and dates before you act.

Photos from Unsplash: Wooden gavel resting on a dark surface next to book · man writing on paper.

This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.