Sometimes, if you act early and have equity. Refinancing can clear the arrears and the lender’s enforcement costs and bring the mortgage current. Your options narrow sharply as a sale approaches, so the week you receive a Notice of Sale is worth far more than the week before closing.
How power of sale works in Ontario
Power of sale is a contractual remedy. Unlike Alberta’s judicial foreclosure, it does not require a court order, which is why Ontario enforcement can move comparatively quickly.
In outline: you fall into default, the default must continue for a set period, the lender serves a Notice of Sale opening a statutory redemption window, and if you do not redeem, the property is sold. You retain the right to redeem until the sale actually completes.
Redeeming means paying arrears plus costs
Bringing the mortgage current is not just the missed payments. It is the arrears plus the lender’s enforcement costs, which accumulate as the process advances. This is the single strongest argument for acting immediately: the number you need only grows.
Where a private mortgage can help
If you have meaningful equity, a private lender may advance enough to clear the arrears and costs and stop the process. The lender is looking at the property and the equity, not at the default that a bank would treat as disqualifying.
This buys time, at a cost, and only works if something changes during that time. If your income has permanently fallen, a new loan postpones the outcome rather than avoiding it.
When refinancing is not the answer
Be honest with yourself about three things. Whether you can afford the new payment from day one. Whether the equity is genuinely there after costs. And whether the situation that caused the default has actually changed.
If the answers are no, a controlled sale on your own timeline usually preserves more of your equity than an enforced sale does. A licensed insolvency trustee or accredited credit counsellor may also be a more appropriate call than any lender.
What surplus means
If the property sells for more than the debt and enforcement costs, the surplus belongs to you, not the lender. That does not make an enforced sale a good outcome, because enforcement costs and a compressed timeline usually mean less surplus than a sale you controlled.
Act in this order
Read the notice carefully and note every date. Get legal advice. Contact a broker to test whether refinancing is realistic. Do all three in the same week, not sequentially over a month.
Full detail on how these files work: Private Mortgage Lending in Ontario. If your property is in Alberta, the process is quite different, see the Alberta guide.
Confirm the specifics for your own situation. Enforcement rules and timelines differ between provinces and change over time. Speak to a licensed mortgage broker or a lawyer in the province where your property is located before acting on anything described here.
Frequently asked questions
How long do I have after a Notice of Sale?
The Mortgages Act sets a statutory redemption window, and the length depends partly on when the mortgage was signed. Read your notice and get legal advice on the dates that apply to you.
Can I stop the process at any point?
You generally retain the right to redeem until the sale actually completes, by paying the arrears plus the lender’s costs. The amount needed grows as the process advances.
Will a power of sale ruin my credit?
A default and enforcement will affect your credit, and the impact lasts. Curing the default earlier limits the damage compared with letting a sale complete.
Is Alberta the same?
No. Alberta uses judicial foreclosure through the Court of King’s Bench, which is court-supervised and generally slower. The Ontario process on this page does not apply to Alberta property.