In short
It's the most common enforcement route in Ontario and is faster than foreclosure.
Power of sale homes are usually sold as is, with little room to negotiate terms.
How power of sale works in Ontario
Most Ontario mortgages include a power of sale clause. If the borrower defaults, the Mortgages Act lets the lender sell the property without going to court, as long as it follows the required notice steps.
In general, the payments must be in default for at least 15 days before the lender can send a notice of sale. The notice then has to give at least 35 days before the lender can sell. It goes to the owner and to others with a registered interest, such as a second mortgage holder.
During that time, the owner can usually bring the mortgage back into good standing by paying the arrears and the lender's allowable costs, or pay it off in full.
Lenders usually aren't allowed to rush a sale. They must give the full notice period, follow the steps in the Act, and generally list and market the home properly.
Where the money goes
After the sale, the lender pays its own mortgage, interest and enforcement costs first, then any later mortgages or registered claims. If money is left over, it goes to the owner.
If the sale doesn't cover what's owed, the lender can still pursue the borrower for the shortfall. Legal fees, interest and real estate commissions all reduce whatever equity remains.
Owners who sell on their own terms before the lender does usually keep more of their equity.
Buying a power of sale property
Power of sale homes are sold as is, often with little or no information about their condition. The lender never lived there and usually won't give warranties.
Expect the lender's own schedule of clauses in the agreement, limited room to negotiate, and sometimes a vacant home that has sat empty. Lenders are expected to sell at a fair market price, so these homes are not automatically bargains.
Book a home inspection, ask your lawyer to review the lender's clauses, and confirm your financing before you firm up.
Common questions about power of sale
How long does a power of sale take in Ontario?
A power of sale usually takes at least about 50 days from the first missed payment before the lender can sell. The mortgage must be in default at least 15 days before a notice of sale, and the notice must give at least 35 days. Real timelines are often longer once the home is listed and sold.
Can you stop a power of sale in Ontario?
Often, yes, if you act before the lender signs a firm deal to sell. The borrower can usually bring the mortgage back into good standing by paying the arrears and allowable costs, or pay off the mortgage, for example by refinancing or selling. Speak with a real estate lawyer as soon as you receive a notice.
Do you get money back after a power of sale?
Yes, if the sale price is more than what's owed. The lender pays its mortgage and costs, then later registered claims, and any surplus goes to the former owner. If the price falls short, the lender can pursue the borrower for the difference.
Are power of sale homes cheaper?
Not necessarily. Lenders have a duty to try to get fair market value, so many power of sale homes sell close to market price. They're sold as is with little disclosure, so build in time for an inspection and a lawyer's review of the lender's clauses.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.