What to Do If You're Behind on Your Mortgage: Options Before Power of Sale Starts

If you are behind on your mortgage, you still have choices. The best time to use them is early, before your lender starts the legal process called power of sale. Power of sale is the way most Ontario lenders force the sale of a home when the owner stops paying.

Your main options are simple. Talk to your lender, catch up on payments, change the loan, or sell the home yourself on your own terms. Each one works best when you act soon. This guide explains the steps, the deadlines, and the practical choices for owners in Mississauga, Oakville, Burlington and Milton.

This page is general information. It is not legal advice. If you have received a legal letter, speak to a lawyer right away.

How Power of Sale Works in Ontario

It helps to know the order of events. Then you know how much time you really have.

• A payment is missed. Your lender usually calls or writes within days. This is the easiest time to fix things.
• The account stays unpaid. Most mortgage contracts let the lender start formal steps once the default has gone on for a set time. Under Ontario's rules, that is generally 15 days.
• A notice arrives. The lender sends a "Notice of Sale Under Mortgage." It states how much you owe and gives you a deadline.
• The 35-day window. After the notice, the law gives you at least 35 days to fix the problem. You do that by paying what is owed, including late charges and the lender's legal costs.
• The lender can sell. If the window ends and nothing is fixed, the lender may list and sell the home to recover its money.

During the window, you still own your home. You can still sell it yourself. Once the lender takes control of the sale, you lose a say in price, timing and who handles the listing.

Lender contracts differ, and the rules have details that matter. A real estate lawyer can read your mortgage papers and tell you exactly where you stand.

Why Acting Early Saves You Money

Every week of delay adds cost. Late fees pile up. Legal bills grow. Interest keeps running on a larger balance. Your credit score also takes a hit with each missed payment.

Acting early also keeps you in control. A lender who sees you reach out is more likely to work with you. A lender who hears nothing has little reason to wait.

Think of it this way. The more time you have, the more choices you have. Once a formal notice is in your hands, your choices shrink fast.

Step One: Call Your Lender

Most people avoid this call. That is understandable. But lenders would rather get paid than take over a home. Selling a home through power of sale costs them time and money too.

Before you call, get ready:

• Write down your mortgage number, your balance and how many payments you have missed.
• List your income and your monthly costs in plain numbers.
• Know why you fell behind. Was it a job loss, an illness, a drop in income, or a rise in your rate?
• Decide what you can pay each month, even if it is less than the full amount.
• Keep notes of every call. Write the date, the name of the person, and what was agreed.

Ask the lender what help it can offer. Ask for any deal in writing before you rely on it.

Options You Can Ask Your Lender About

Lenders have a few common tools. Not every lender offers all of them, and none are guaranteed. But it costs nothing to ask.

• A payment plan. You catch up on missed payments in small pieces over several months, on top of your regular payment.
• A payment break. You pause or lower payments for a short time. The unpaid amount is usually added back later.
• A longer amortization. You stretch the loan over more years so each payment is smaller. You pay more interest in the long run.
• Adding arrears to the loan. The missed amount is rolled into your balance. Your payment goes up a little, but the default is cleared.
• A change in payment date. If your pay arrives later than your due date, a new date can fix repeat misses.

Be honest about what you can afford. A plan you cannot keep only delays the problem and may leave you worse off.

Other Ways to Catch Up

If your lender cannot help enough, look at other sources. Some work well. Some carry risk. Weigh each one with care.

• Family or friends. A short loan from someone you trust can bridge a gap. Put the terms in writing.
• Cutting costs. Pause extras, review subscriptions, and cut anything that is not a need.
• More income. Extra hours, a side job or renting a spare room can help, if your mortgage and local rules allow it.
• A second mortgage or line of credit. This can clear arrears, but it adds a new debt and new payments. Treat it with caution.
• A credit counsellor. A non-profit credit counselling agency can help you build a budget and talk to creditors. Check that the agency is a non-profit before you share any information.

Avoid anyone who asks for a big fee up front to "save your home." Also avoid anyone who asks you to sign your home over to them. Get legal advice before signing anything.