When it comes to owning a home, unforeseen difficulties can sometimes put you at risk of losing it. In Ontario, most people call this "foreclosure," but the process the vast majority of Ontario lenders actually use is power of sale. The two are different, and the difference decides how much time you have and whether you keep any equity left over.
This guide explains what really happens when an Ontario homeowner falls behind, walks through the power of sale timeline step by step, and sets out the options you have at each stage. If you are already behind on your payments, acting early is the single biggest thing in your favour.
Understanding Foreclosure Process: In Other Provinces
The way lenders recover an unpaid mortgage varies from province to province. True judicial foreclosure — where the lender goes to court and can end up taking ownership of the property — is the common route in provinces such as British Columbia, Alberta, Manitoba, Saskatchewan, Quebec, and Nova Scotia.
In Ontario, Newfoundland, New Brunswick, and Prince Edward Island, lenders instead rely mainly on power of sale. Under power of sale the lender does not take ownership of your home; they sell it to recover what they are owed, and any money left over after the debt and costs are paid is returned to you. That single distinction is why, if you are in Ontario, your timeline and your rights are different from what you may read on American websites or on pages written for other provinces.
When does Foreclosure happen to Homes?
The process begins when a homeowner defaults on their mortgage payments. Most Ontario lenders make contact by phone and letter after the first missed payment, and typically refer the file to their legal department or an outside law firm after two to three missed payments. Exactly when that happens depends on the terms in your mortgage and the lender's own policies.
The consequences of letting it run to the end are serious: you can lose your home, and the missed payments and enforcement will damage your credit for years, affecting your ability to borrow or buy again. Understanding how the process works — and how much time each stage really gives you — is what lets you step in before it is too late.
Laws and regulations governing foreclosures in Ontario
Enforcement in Ontario is governed by the Ontario Mortgages Act. True foreclosure is available here, but it is a judicial process: the lender must apply to the court for permission to take or sell the property, which is slow and expensive. In practice almost all Ontario lenders choose power of sale instead, because it is faster and does not require going through the courts. Lenders are also generally willing to work with homeowners who act early, before enforcement is well underway.
Foreclosure Process in Ontario: Step by Step
Because Ontario lenders almost always use power of sale, the steps below describe that process — what most Ontario homeowners are actually facing when they say they are "in foreclosure." The rare judicial foreclosure route is noted at the end.
Missed Payments and Default
The process starts when you miss one or more mortgage payments. Your lender adds late charges and issues a demand for the arrears. Nothing is registered against your home yet, and this is by far the cheapest and easiest stage at which to fix the problem.
Notice of Sale
Under the Ontario Mortgages Act, a lender cannot issue a Notice of Sale until your default has continued for at least 15 days. Once that period has passed, the lender serves the Notice of Sale on you and on anyone else registered on title. It sets out the exact amount required to bring the mortgage current and starts the redemption period below. From this point the lender's legal and enforcement costs are added to what you owe and grow every week.
Redemption Period
The Notice of Sale gives you a redemption period of at least 35 days to pay the arrears, interest, and the lender's costs and reinstate the mortgage. The lender cannot complete a sale during this window. This is the stage at which most homeowners come to us, and it is where a power of sale can still be stopped by arranging financing to clear the arrears before the period closes.
Listing and Sale
If the redemption period passes without payment, the lender can list the property for sale, usually through a real estate agent. At this stage the full mortgage balance, not just the arrears, generally becomes payable to redeem. The lender must act in good faith and obtain fair market value, but has no incentive to hold out for the best price — only to recover what it is owed.
Sale and Distribution of Proceeds
Once the property sells, the proceeds pay off the mortgage balance, arrears, and the lender's legal and selling costs, in order of priority. Any money left over — the surplus — is returned to you. If the sale falls short of what is owed, under power of sale the lender may pursue you for the shortfall. This differs from a completed judicial foreclosure, where the lender takes title in satisfaction of the debt and generally cannot pursue a shortfall, but also keeps any surplus. Because outcomes vary, get legal advice about your specific situation.
The rare judicial foreclosure route
If a lender does choose true foreclosure instead of power of sale, the path runs through the courts: a Statement of Claim for Foreclosure is filed, you have a limited window to respond, and if the court grants an Order for Foreclosure, ownership of the property transfers to the lender. This route is uncommon in Ontario because it is slower and costlier for the lender. If you have received a court document rather than a Notice of Sale, get legal advice immediately, because the timeline and your rights differ from power of sale.
How Common Is Mortgage Trouble in Ontario Right Now?
If you are behind on your mortgage, you are far from alone, and the pressure is rising fastest in Ontario. Mortgage arrears — payments more than 90 days past due — remain low by historical standards, but the Canada Mortgage and Housing Corporation (CMHC) reports they have been climbing and expects them to keep rising moderately across Canada into late 2026, with Toronto and the Greater Toronto Area under the most strain. CMHC notes the GTA's arrears rate has roughly doubled over the past two to three years, and Ontario has moved above the national average for the first time in more than a decade.
The main driver is the mortgage renewal wave: many homeowners who locked in at ultra-low pandemic-era rates are now renewing at much higher ones, and the jump in monthly payments is pushing more households into arrears. The takeaway is simple — if your payments have become difficult, acting early gives you far more options than waiting until foreclosure or power of sale is already underway.
Source: CMHC, Mortgage Renewal Wave analysis (2026), drawing on Equifax and Canadian Bankers Association data.
Differences Between Foreclosure and Power of Sale
Both foreclosure and power of sale are legal remedies a lender can use to recover an unpaid mortgage, but they work very differently.
Foreclosure: In a true foreclosure, the lender takes full ownership of the property through the courts and then sells it. It is a judicial process involving court orders, and it is uncommon in Ontario.
Power of Sale: In Ontario, lenders almost always use power of sale, selling the property without taking ownership and without court intervention. It is faster and less costly, and any surplus after the debt and costs is returned to you.
Rights and Options for Homeowners Facing Foreclosure
Ontario homeowners have specific rights and options when facing enforcement. Understanding them helps you navigate the process more effectively:
- Right to redemption: During the redemption period you can pay the arrears (or, later, the full balance) and costs to stop the process and reinstate the mortgage.
- Reinstatement: Before a sale is completed, you may be able to bring the mortgage current by paying all overdue amounts plus applicable fees.
- Legal representation: You have the right to independent legal counsel, who can review documents, advise on your rights, and negotiate with the lender's solicitor.
- Selling on your own terms: If keeping the home is no longer realistic, selling it yourself before a forced sale usually gets a better price and helps you avoid a completed enforcement on your record.
Using these options early gives you the best chance of keeping your home or minimizing the damage.
5 Strategic Ways to Save Your Property from Foreclosure
Get a Private Loan
One avenue to consider is a private loan. Private lenders are often more flexible than banks and can provide the funds to pay off your outstanding mortgage arrears and stop the sale.
Refinance Your Mortgage
Refinancing your mortgage lets you adjust your loan terms, potentially lowering your monthly payments or consolidating debt into a single loan. This can give you room to manage your finances and avoid enforcement. Discuss your options with a mortgage professional to understand the implications and benefits based on your situation.
Negotiate with the Lender
Communicating openly with your lender about your financial difficulties can sometimes lead to modified arrangements that prevent a sale. Some lenders may extend the amortization period, reduce the interest rate, or temporarily defer payments. A proactive approach matters, and expressing it early can be pivotal.
Have a Private Lender Buy Out the Mortgage
Another strategy is to find a private lender willing to buy out your existing mortgage. This clears the debt with your original lender and stops the process. Make sure you understand the private lender's terms, as they may differ significantly from your original mortgage.
Request Forbearance
Forbearance is an agreement to temporarily suspend or reduce your mortgage payments for a set period. Lenders may agree to it if you have faced an unexpected setback such as job loss or illness. Requesting it involves a formal application with evidence of your situation, and it is worth considering if you expect your circumstances to improve soon.
Secure Your Property Before It’s Late
Navigating a power of sale or foreclosure is stressful, but understanding the process and the law behind it makes it far more manageable. If enforcement seems imminent, consult a legal or financial professional to explore every option and right available to you.
Turnedaway.ca helps Ontario homeowners reduce the risk of foreclosure by arranging financing built around your specific situation. Every case is different, so personalized advice is key. We encourage homeowners to seek help early, before things become critical — early intervention leads to more options and better outcomes. Contact us today and save your home.
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Frequently Asked Questions about Foreclosure in Ontario
Do you get any money if your house is foreclosed in Ontario?
Yes, in most cases. Because Ontario lenders use power of sale, the property is sold and any money left after the mortgage, arrears, interest, and legal and selling costs is returned to you as surplus. You receive nothing only if the sale does not cover those debts, or in the rare case of a completed judicial foreclosure, where the lender takes title to the property.
How many missed mortgage payments lead to foreclosure in Ontario?
Most Ontario lenders begin enforcement after two to three consecutive missed payments, though this varies with your mortgage agreement and the lender's policies. For a full breakdown of the thresholds and what happens at each stage, see our guide on how many missed mortgage payments it takes before foreclosure.
How long does the foreclosure process take in Ontario?
Because Ontario uses power of sale, the statutory minimum is short — at least 35 days from the Notice of Sale to redeem — but the full process from the first missed payment to a completed sale commonly runs about 4 to 6 months, and can take longer depending on the lender and the circumstances.
How long does judicial foreclosure take in provinces like British Columbia or Alberta?
Judicial foreclosure in provinces like British Columbia and Alberta typically takes longer because of court involvement, often 9 to 18 months or more depending on the specifics of the case.
