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Power of Sale in Ontario: Your Options

Behind on mortgage payments, or holding a Notice of Sale? Power of sale is the way an Ontario lender can sell a home after the borrower defaults. It moves on deadlines, but you usually still have options while the sale has not closed: catch up the arrears, refinance using your home equity, sell on your own terms, or get legal advice on your rights. This page explains how the process works and where Equity Rich can help GTA homeowners: we lend up to 80% of your home’s value, subject to approval, based mainly on your home equity (income proof optional), with funds in days once approved. Call 647-930-9738 to talk it through today.

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What is power of sale in Ontario?

Power of sale is a right written into most Ontario mortgages and governed by Ontario law. If you default, usually by missing payments, the lender can sell your property to recover what it is owed without taking ownership of the home first.

From the sale money, the lender takes the mortgage balance, the arrears, interest, its legal fees and the costs of selling. Anything left over goes to other lenders registered on the title, then to you.

Power of sale vs. foreclosure: what is the difference?

  • Power of sale is the process most Ontario lenders use. The lender sells the home and must account for the money. Any surplus belongs to you and other creditors.
  • Foreclosure goes through the courts. The lender asks the court to take ownership of the property, and the owner can lose all of their equity. It is slower and much less common in Ontario.

Either way, the earlier you act, the more choices you keep.

How the power of sale process works in Ontario

Every file is different, but the steps usually run in this order:

1

Missed payments

One or more payments, property taxes or insurance go unpaid and the account falls into default.

2

Demand letter

The lender, or its lawyer, writes asking you to bring the account up to date.

3

Notice of Sale

A formal notice is served on you and on anyone else with an interest in the property. It names the amount needed to bring the mortgage back into good standing and the date by which it must be paid.

4

Redemption period

The minimum waiting period is set by Ontario law and by your mortgage terms; check your notice for your exact dates. During this time you can usually pay what is owed and keep the home.

5

Possession and listing

If nothing is paid, the lender may take steps to take possession and list the property for sale.

6

Sale and accounting

The home is sold, the lender is paid out with its costs, and any surplus is paid out in order of priority.

The dates that matter are in your own Notice of Sale. This page is general information, not legal advice. For questions about your rights or deadlines, speak with an Ontario real estate lawyer.

What are your options when facing power of sale?

1. Talk to your lender

Call your lender, or its lawyer, as soon as you can. Ask for the exact amount to bring the account current, including fees, and whether a payment plan or short extension is possible. Get anything they agree to in writing.

2. Refinance or take a second mortgage on your equity

If your home is worth more than you owe, that equity may be used to pay the arrears and costs, or to replace the mortgage that is in default. A second mortgage can leave your first mortgage in place and cover what is owed. A full refinance with a home equity loan can replace the defaulted mortgage. If other debts pushed you behind, a debt consolidation mortgage may roll them into one payment.

3. Sell on your own terms

If keeping the home is not realistic, selling it yourself before the lender does often protects more of your equity. You choose the agent, the price and the timing, within the deadlines you face.

4. Get legal advice

A real estate lawyer can check whether the notice and the amounts claimed are correct, explain your deadlines and advise on your rights. If you are working with us, your lawyer also reviews any financing offer before you sign.

How Equity Rich can help

Equity Rich is an equity-based mortgage lender in Toronto. We look first at your property and the equity in it, not only at your credit score or income. That makes us a practical option for homeowners the bank has declined, the self-employed, and people with bruised credit. Where one of our own products is not the right fit, we can also bring in partner lenders through our brokerage access, including private mortgage options.

For a homeowner facing power of sale, equity-based financing may be used to:

  • pay the arrears, interest and the lender’s costs on the existing mortgage
  • refinance the defaulted mortgage into a new one
  • consolidate other debts that put you behind

All financing is subject to approval, and it depends on your property’s value, how much equity you have, the amount owed and the time left before the sale. We cannot promise an outcome, but once approved, funds arrive in days. We can tell you quickly and honestly whether financing looks possible.

How it works with us

  1. Call or send the form. Tell us about the property, what is owed and the dates on your notice.
  2. Equity review. We look at the property value, the mortgages on title and the arrears.
  3. Options and offer. If financing looks possible, we explain the terms and costs in plain words.
  4. Legal review and closing. Your lawyer reviews the offer, and funds go to pay out what is owed.

What to have ready

The faster we can see the full picture, the faster we can give you an answer. Have these to hand, or send what you have:

  • the Notice of Sale or demand letter, with every page
  • your latest mortgage statement for each mortgage on the property
  • the property address and type (house, townhouse, condo)
  • a recent property tax bill
  • any recent appraisal, if you have one
  • a list of other debts you would like to clear

We work with homeowners across Toronto and the GTA: Durham, York, Peel, Halton and Hamilton.

This page is general information, not legal or financial advice. All financing is subject to approval. EquityRich.ca is a referral institution; its agents and brokers represent Everything Mortgages (FSRA #12755).

Quick Facts

  • Max LTV Up to 80% combined, subject to approval
  • Credit Check Reviewed
  • Funding Speed In days, once approved

Ready to Get Started?

Approval is based mainly on your home equity. Credit is reviewed, and income proof is optional.

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Power of sale in Ontario: frequently asked questions

Received a Notice of Sale? Talk to us today

Every day counts once a notice arrives. Call Equity Rich at 647-930-9738 for an urgent, confidential review of your options, or send us your details through the form and we will call you back.

Get a free assessment Call 647-930-9738