Power of sale is a process where your mortgage lender sells your home to get back the money you owe. It starts when you fall behind on your mortgage. It does not need a court case in most Ontario situations. The lender follows steps set out in your mortgage contract and in Ontario law.
The timeline has a few clear stages. First you miss payments. Then the lender sends a demand letter. After that comes a formal notice of sale. The lender cannot sell until the notice period ends. If you act early, you often keep the choice of how this ends.
This guide walks through each stage in plain words. It also shows what you can do at each point and what mistakes to avoid. It is general information, not legal advice. Talk to a real estate lawyer about your own mortgage.
The Power of Sale Timeline, Step by Step
Every mortgage is a bit different. The order of events is usually the same. Here is how it tends to unfold.
- Missed payments. You miss one or more payments. Many mortgages let a lender act once you are a short time behind. Most lenders wait longer and try to reach you first.
- Calls and letters. The lender contacts you and asks you to catch up. This is the easiest time to work out a plan.
- Demand letter. A lawyer for the lender may send a letter. It says how much you owe and gives you a short deadline to pay.
- Notice of sale. If you do not catch up, the lender serves a formal notice of sale. In Ontario, the lender must wait 35 days after giving this notice before it can sell.
- Listing. After the notice period ends, the lender can list the home. It usually hires a real estate agent.
- Offer and closing. The lender accepts an offer, and the sale closes like any other sale. The new owner gets the home.
- Payout. The lender pays itself first. If money is left over, it goes to others with a claim on the home, then to you.
The whole process can take a few months from the first missed payment. It can be shorter or longer. The lender's own rules and the paperwork in your case change the pace.
Why the 35 days matter
The notice period gives you a fair chance to fix the problem. You can use it in several ways. You can pay what you owe. You can find a buyer yourself. You can talk to your lender about a plan. After the notice period ends, you lose time and options quickly.
Who gets the notice
The lender must also tell others who have a claim on the home. That can include a second lender, a spouse who has rights in the home, or someone who registered a lien. Everyone with a claim has a stake in how the sale goes.
Your Options During the Notice Period
You are not stuck. In the weeks after a notice of sale, you usually have several paths. Each one has trade-offs.
Option 1: Catch up and keep the home
Ontario law lets you cancel the process by paying what is owed. This is called reinstating or redeeming the mortgage. You pay the missed payments, the interest, and the lender's costs. You can do this before the home is sold. The legal fees add up fast, so ask for a full payout figure in writing.
Some owners get help from family. Others refinance with a different lender or use savings. Each route takes time, so start right away.
Option 2: Make a deal with your lender
Lenders usually prefer a plan over a forced sale. A forced sale costs them time and money too. Ask whether they will take a payment plan, a short pause, or a change to the loan. Get any deal in writing. A phone promise is not enough.
Option 3: Sell the home yourself
This is often the best choice if you cannot catch up. You list the home with your own agent. You choose the price, the timing, and the buyers you accept. A normal sale usually brings better results than a sale that the lender runs under pressure.
Your agent can show buyers a clean, well-prepared home. They can also tell you what your lender needs for a payout. You can read our guide on common mistakes and practical advice when selling your home to get ready.
Your lender must agree to the price, since it needs to be paid in full. If the sale price covers your mortgage and costs, you walk away with the leftover money. That is why selling early protects your equity. Equity is the part of the home's value that you own after the mortgage is paid.
Option 4: Let the lender sell
If nothing else works, the lender sells the home. It must try to get a fair price and act in good faith. It does not have to wait for the best possible offer. It also sells the home as it is, with no promises about its condition.
What Happens After the Notice Period Ends
Once the 35 days pass, the lender can list the home. You may still live there at this point. The lender will usually ask for access so that an agent can take photos and show buyers.
Offers come in like any other sale. The lender picks an offer and signs a deal. The deal often has few conditions. Buyers get no warranty from the lender, so many ask for lower prices or inspections where the lender allows them.
You can learn more about how these sales close in our guide to the Ontario home closing process. The steps are much the same. The lender gives the buyer clear title, and the buyer pays on the closing date.
Where the money goes
The sale price is shared in a set order. It helps to know the order, so here it is in plain words:
- First, the lender is paid what you owe, plus interest and costs of the sale.
- Next, other claims on the home are paid, such as a second mortgage.
- Last, anything left goes to you.
If the price does not cover the debt, you may still owe the rest. A lender can ask you to pay the shortfall. This is another reason to talk to a lawyer early.
Power of sale is not foreclosure
People mix up these two terms. In a foreclosure, the lender goes to court and takes ownership of the home. It keeps any extra value. Power of sale is different. The lender only sells the home and takes what it is owed. You keep the leftover money. Power of sale is the more common route in Ontario.
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How It Differs by Property Type and City
The steps are the same everywhere in Ontario. The details change by home type and by area. Here are a few things to think about.
Condos and townhouses
Condo owners pay a monthly maintenance fee. If you fall behind on fees, the condo corporation can register a lien. A lien is a legal claim on your unit. It can lead to a sale even if the mortgage is current. Condo owners with a mortgage can face both problems at once. If you own a condo, check both bills. Buyers who browse Mississauga condos for sale will see how many units have fees. Fees are part of every condo's costs, so they affect the final payout too.
Detached homes and semis
Larger homes often have more equity built up over the years. That gives you more room to sell on your own and still come out ahead. It also means a lender sale can leave more money on the table. A home that needs repairs may sell for less when the lender sells it as is.
Differences by city and neighbourhood
Each area has its own buyer pool. A waterfront community such as Port Credit in Mississauga draws different buyers than a quiet family street in Milton. Buyer demand affects how fast a home sells and how many offers it gets. That is true in Oakville, Burlington, and Milton as well.
Prices and sales speed change often, so do not rely on old numbers. Check the live Mississauga homes market report or the Oakville homes market report for current figures. Learn how to read those numbers, and ask your agent what they mean for your home.
If you are not sure where to look, our West GTA real estate listings let you see what similar homes are doing right now.
Common Mistakes Homeowners Make
Many problems come from waiting. These are the mistakes we see most often.
- Ignoring the letters. Unopened mail does not stop the clock. Notices count once they are served.
- Waiting too long to ask for help. Options shrink after the notice period ends.
- Taking a verbal promise. Always ask for any new payment plan in writing.
- Skipping legal advice. A real estate lawyer can read your mortgage and explain your rights.
- Not knowing your equity. Ask an agent for a price opinion early. It tells you whether a sale can clear the debt.
- Letting the home run down. Poor upkeep lowers what buyers will pay.
- Trusting quick-cash offers. Some buyers target people in trouble and offer far too little. Compare every offer with a fair price.
Questions to ask your lender
- What is the exact amount needed to bring the mortgage up to date?
- What costs and fees have been added so far?
- What is the date of the notice of sale?
- Will you accept a sale by me, and what payout do you need?
- Will you agree to a payment plan in writing?
You may also find it helpful to read about the signs a property might be heading toward power of sale. It shows the warning signs early, from both the owner's side and the buyer's side.
What This Means For You
If you are behind on your mortgage, time is your most valuable tool. Each stage of the timeline gives you fewer choices than the last. The best results usually come from owners who act before the notice of sale, or in the first days after it.
Here is a simple plan to follow:
- Open every letter and write down each date.
- Call your lender and ask for a payout figure and a plan.
- Speak with a real estate lawyer about your mortgage terms.
- Ask an agent what your home could sell for, and what it would cost to sell.
- Decide quickly whether to keep the home or sell it yourself.
Selling on your own often protects your equity better than waiting for a lender sale. It also gives you control over the move-out date. You can plan where to live next, instead of being surprised.
Power of sale is stressful, and it is also manageable when you have a clear map. You do not have to work through it alone. A good agent and a good lawyer can walk you through each step.
If you want to talk about your options, reach out to The Condo Bar. We can give you a straight answer about what your home could sell for and how long a sale could take. There is no pressure, and the call is private.
Frequently asked questions
What does power of sale mean in Ontario?
It means your mortgage lender can sell your home when you fall behind on payments. The lender uses the proceeds to pay what you owe. Any money left over goes to others with a claim on the home, then to you.
How long does power of sale take?
The law sets one clear step: after a notice of sale, the lender must wait 35 days before selling. The full process, from the first missed payment to a closed sale, usually takes a few months. Your lender's steps and the facts of your case change that.
Can I stop a power of sale?
Often, yes. You can pay the missed payments, interest, and costs before the sale is done. You can also make a deal with your lender or sell the home yourself. The sooner you act, the more choices you have.
Is power of sale the same as foreclosure?
No. In a foreclosure the lender goes to court and takes ownership of the home. In a power of sale the lender only sells the home and collects what it is owed. You keep any money left over.
Will I get money if the home sells?
You may. After the lender is paid in full, along with other claims on the home, the rest goes to you. If the sale does not cover the debt, you could still owe the shortfall.
Is it better to sell the home myself?
Often it is. You pick the agent, the price, and the timing. A normal sale usually brings a better price than a rushed lender sale. You need your lender to agree to the payout, so talk to them first.
Who should I talk to first?
Call your lender and a real estate lawyer. Then ask a local agent what your home could sell for. Those three people can tell you what your best path is.
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Aggregate estimates from TRREB MLS® data (PropTx feed). Deemed reliable but not guaranteed, and not an appraisal. Full terms.
Miko Nalepa
Realtor® at The Condo Bar Real Estate · RECO #4737024
With 15+ years in real estate and a GTA West focus since 2016, Miko Nalepa is a Realtor® with Right At Home Realty, Brokerage, specializing in condos, townhouses, and detached homes across Mississauga, Oakville, Burlington, and Milton. The focus stays deliberately narrow -- four cities, not a Toronto-wide practice -- because that's what it takes to know individual buildings and blocks, not just neighbourhood names.
Miko Nalepa is also the creator of The Condo Bar, the data platform behind this site, tracking building-level sales history and live market reports across 450+ GTA West condo buildings so every recommendation starts with what comparable units actually closed for, not asking price.