What is the difference between power of sale and foreclosure in Ontario?

Power of sale and foreclosure are both legal remedies available to mortgage lenders in Ontario when a borrower defaults, but they work differently and have different consequences for the borrower.

Power of sale is the far more common remedy in Ontario. The lender does not need a court order to sell the property (though notice requirements apply), and the borrower has a statutory redemption period to pay off the arrears and costs before the sale proceeds. If the property sells for more than the outstanding mortgage debt and costs, the surplus goes to the borrower. If it sells for less, the lender can pursue the borrower for the shortfall.

Foreclosure is a court-based process in which the lender ultimately acquires ownership of the property itself. It extinguishes the borrower's equity but also the lender's right to pursue a deficiency — the lender gets the property but cannot sue for any remaining balance. Foreclosure is rare in Ontario because power of sale is generally faster and more practical for lenders.

If you receive a power of sale notice, you typically have time to either pay the arrears or sell the property yourself to maximize your proceeds. Speaking with a lawyer immediately after receiving any default notice gives you the best chance to protect your equity and your options.