How to Stop a Power of Sale in Ontario

If you have received a Notice of Sale, the most important thing to understand is this: a power of sale can usually be stopped — but only if you act quickly. Ontario law gives borrowers real rights and a real window of time, and there are five practical ways to bring the process to a halt before you lose your home.

The short answer: You can stop a power of sale in Ontario by redeeming the mortgage, refinancing it, negotiating with your lender, selling the property yourself, or going to court. Each option depends on time — once the lender signs a sale to a buyer, your right to redeem can be lost.

#What is a power of sale in Ontario?

A power of sale is the most common mortgage-enforcement remedy in Ontario, and it is governed by the Mortgages Act. It lets a lender sell your property to recover what you owe after you fall into default — without first becoming the owner and, in most cases, without going to court.

Default usually means missed mortgage payments, but it can also be triggered by unpaid property taxes or lapsed insurance on the home. Whatever the cause, the lender cannot move immediately. The process follows a strict statutory sequence designed to give you a chance to put things right.

#What happens after I default — and how much time do I have?

Understanding the timeline is the key to protecting yourself, because every option below depends on where you are in it:

• Step 1 — Default must continue for 15 days. After you fall into default, the lender must wait at least 15 days before it can issue a Notice of Sale. Nothing formal happens during this short window, but it is the moment to start seeking help.
• Step 2 — The Notice of Sale. Once the default has continued, the lender issues a Notice of Sale under the Mortgages Act. This document is your warning that enforcement has begun.
• Step 3 — The redemption period. The Notice of Sale gives you a statutory redemption period of at least 35 days. During this window you have the legal right to act, and the lender generally cannot commence a court action to enforce the mortgage.
• Step 4 — The sale. After the redemption period, the lender may list and sell the property. This is where time becomes critical: once the lender signs an agreement of purchase and sale with a third-party buyer, your right to redeem can be lost.

The takeaway is simple. The earlier you act, the more options you have — and the more of your equity you keep.

#The five ways to stop a power of sale

There is rarely just one path forward. Depending on your finances, your equity, and how much time remains, one or more of these five strategies may apply. Here is how they compare at a glance:

1. Redeem the mortgage

To redeem means to cure the default and bring the mortgage back into good standing. You can do this two ways:

• Reinstate the mortgage by paying the arrears plus the lender's costs (legal fees and enforcement expenses incurred to date). This restores the mortgage as if the default never happened.
• Pay out the mortgage in full, satisfying the entire balance, interest, and costs.

Redemption is the cleanest way to stop a power of sale, and your right to redeem is protected throughout the statutory period.

2. Refinance the mortgage

If you cannot pay the arrears from savings, you may be able to refinance — obtain a new mortgage that pays out the defaulting one. Many borrowers in default turn to a B-lender or private lender, who may approve a loan based on the equity in the home even when an A-lender will not. The new mortgage clears the old debt and stops the power of sale, buying you time to stabilize your finances.

3. Negotiate with your lender

Lenders are often willing to work with borrowers, because a negotiated resolution can be faster and cheaper for them than completing a sale. Options include:

• A forbearance agreement, where the lender agrees to hold off on enforcement for an agreed period.
• A repayment plan that spreads the arrears over several months.
• A reinstatement on agreed terms.

A lawyer can negotiate these arrangements on your behalf and make sure any agreement is properly documented and genuinely workable.

4. Sell the property yourself

If keeping the home is not realistic, selling it yourself — before the lender does — is almost always the better outcome. An owner's sale typically nets more than a lender's sale, gives you control over price and timing, and lets you keep any equity that remains after the mortgage is paid out. Acting during the redemption period preserves this option; waiting until the lender has a signed buyer can remove it.

5. Go to court

In some situations, the courts can help:

• You can seek relief from the court, such as more time to redeem.
• You can challenge a Notice of Sale that is defective or fails to comply with the Mortgages Act. A notice with the wrong figures, improper service, or an incorrect redemption period may be invalid, which can pause or unwind the process.

Court applications are technical and time-sensitive, so this route should be guided by an experienced lawyer.

#What protections do I have as a borrower?

Even where a sale proceeds, Ontario law does not leave borrowers without protection:

• Surplus proceeds must be returned to you. After a sale, once the debt, interest, and costs are paid, any surplus belongs to the borrower and must be paid out to you.
• The lender owes a duty of good faith. A lender selling under power of sale must act in good faith and take reasonable steps to obtain fair market value for the property. It cannot simply dump the home at a fire-sale price.

There is, however, an important warning. If the sale produces a shortfall — the property sells for less than what you owe — the lender can still pursue you for the deficiency on your personal covenant under the mortgage. This is one more reason that selling the property yourself, for the best possible price, often protects you the most.

#Why acting fast matters most

Almost every option above narrows as the clock runs. Once the lender enters a binding agreement of purchase and sale with a buyer, redemption may no longer be available, and your remaining choices shrink. The borrowers who keep their homes — or at least keep their equity — are almost always the ones who picked up the phone early.

If you have missed payments, received a Notice of Sale, or simply fear one is coming, do not wait. Our team can review your mortgage and the lender's notice, identify which of these five strategies fits your situation, and act quickly to protect your equity. Learn more about our mortgage enforcement services, or read our companion guide on power of sale vs. foreclosure in Ontario to understand how the process compares to the alternative.

When you are ready, contact Tokas Lex for prompt, practical advice. The sooner you act, the more we can do.

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This article provides general information about Ontario law and is not legal advice. Timelines and rights under the Mortgages Act depend on the terms of your specific mortgage and the facts of your situation. If you are facing a power of sale, please consult a lawyer promptly.