📅 Published 2026-08-03
✍️ NestBridge Team
📍 Ottawa, Ontario
What Is Power of Sale in Ontario?
Power of sale is the legal process Ontario mortgage lenders use to sell a property when a borrower defaults on their mortgage. Under the Mortgages Act of Ontario, lenders can begin proceedings after just 15 days of default.
Unlike foreclosure (used in some US states and other Canadian provinces), power of sale does not transfer ownership to the lender. Instead, the lender sells the property on your behalf, recovering what's owed, and you receive any remaining equity.
Power of Sale vs. Foreclosure — Key Differences
- Power of sale (Ontario): Lender sells the home. You keep surplus equity. Process takes 35–60+ days from first notice. You can redeem by paying the full mortgage at any point before sale.
- Foreclosure (rare in Ontario): Lender takes ownership of the home. You lose all equity. A court process — much slower but you lose everything.
Power of sale is faster for lenders and more protective of homeowner equity than foreclosure — but lenders typically sell quickly at auction, often below full market value. This means your equity can be eroded even in power of sale if you don't act first.
The Power of Sale Timeline in Ontario
1
Day 1–15: Default
You miss one or more mortgage payments. After 15 days, the lender has the legal right to begin proceedings.
2
Notice of Sale
The lender sends a Notice of Sale Under Mortgage, giving you 35 days to remedy the default (catch up on payments and costs) or face the property being sold.
3
Property Listed & Sold
If you don't remedy within 35 days, the lender can list and sell the property — typically quickly at below-market prices.
4
Proceeds Distributed
Mortgage balance, legal fees, and costs are paid first. Any remaining equity goes to you. Any shortfall becomes a deficiency judgment against you.
⚠️ The most important thing to know
If you've received a Notice of Sale, contact a real estate lawyer immediately and consider reaching out to NestBridge. Selling on your own terms — before the lender acts — lets you control the price and protect your equity. Every day matters.