Power of sale and foreclosure are both ways a lender enforces a mortgage after a borrower defaults, but they are different legal processes with very different consequences for you. In Ontario, one of them is used in almost every case, and the other is rare. Knowing which one is in front of you changes your timeline, what happens to your equity, and what your options are.

The good news is that whichever one you are facing, if you own your home and there is equity in it, the process can almost always be stopped, and the equity you have built is what makes it possible. If there is little or no equity left after the mortgage and any registered debts, we will tell you that plainly rather than take you through an application that cannot work. This page is here to help you understand the difference and see your options clearly.

Power of Sale vs Foreclosure: What Actually Differs

The simplest way to hold the difference in your head is this: under a power of sale, the lender sells your property but you keep any money left over after the debts and costs are paid. Under a foreclosure, the lender goes to court to take ownership of the property itself, and keeps whatever it is later worth.

That single distinction, who ends up owning the home and who keeps the surplus, drives everything else. Here is the full side-by-side.

Which One Are You Actually Facing?

In Ontario, the answer is almost always power of sale. Lenders here overwhelmingly use it, because it is faster and does not require going to court. If you have received a document from your lender or their lawyer, look at the title. A Notice of Sale under Mortgage means power of sale, and it will set out the amount you owe and the earliest date the property can be sold. If you want to see exactly what that document looks like and what each part means, read our guide to how power of sale works in Ontario.

True foreclosure is uncommon in Ontario but is used more often in some other provinces. Because people use the word foreclosure to mean any enforcement, it is worth confirming which process you are in before you plan around it, since the timelines are different. Our stop foreclosure page covers the judicial process and where it is common across the country.

Whichever it is, the practical question is the same: is there enough equity in the property to pay out the arrears and the lender's costs and reinstate the mortgage, or to buy you the time to sell on your own terms? That is what determines your options, not which label is on the paperwork.

What This Means for Your Options

Because power of sale returns any surplus to you, stopping it early is almost always the better financial outcome than letting it run. The same equity that the process would eat into is the equity we use to solve the problem. Depending on your situation, that takes one of a few forms.

The full walkthrough of how the numbers are assessed, with worked examples, is on our main stop a power of sale page.

Frequently Asked Questions

What is the difference between power of sale vs foreclosure?

Under power of sale, the lender sells the property without going to court and returns any surplus to you after the debts and costs are paid. Under foreclosure, the lender goes to court to take title to the property itself and keeps any later gain. Power of sale is faster and is the standard route in Ontario; foreclosure is rare here.

Does Ontario use power of sale or foreclosure?

Ontario lenders overwhelmingly use power of sale. True foreclosure exists in Ontario but is uncommon, because power of sale is faster and does not require a court order. If you have a notice from your lender, it is almost certainly a Notice of Sale under mortgage.

Which is worse for the homeowner, power of sale or foreclosure?

For most homeowners, foreclosure is worse, because the lender takes title and keeps any surplus. Power of sale at least returns whatever is left after the debts and costs. That said, either one can consume a large share of your equity if it runs its course, which is why acting early matters in both cases.

Do I keep my leftover equity in a power of sale?

Yes. After a power of sale, the proceeds pay the first mortgage, then selling and legal costs, then any other registered charges in priority order, and whatever remains is returned to you. The practical problem is that enforcement costs and a rushed sale often leave far less than you would keep by stopping the process yourself.

Is foreclosure common in Ontario?

No. Foreclosure is legally available in Ontario but rarely used, because power of sale is faster and does not require a court order. It is more common in some other Canadian provinces. In Ontario, nearly every mortgage enforcement you will see is a power of sale.

How long does a power of sale take compared to foreclosure?

Power of sale is faster. After a default of at least 15 days, the Notice of Sale gives a redemption period of at least 35 days, so a sale can happen within a couple of months. Foreclosure runs through the court and generally takes longer, often several months, because it involves a court process.

Can both power of sale and foreclosure be stopped?

Yes. A power of sale can be stopped up until the property is actually sold, and a foreclosure until the final court order is issued. In both cases the key is arranging financing against your equity to pay out the arrears and costs. The options are set out on our stop a power of sale page.