What does power of sale mean for me as a homeowner in Ontario?

Power of sale is a remedy available to Ontario mortgage lenders when a borrower is in default. Unlike foreclosure (which is rare in Ontario), a power of sale allows the lender to sell the property without going to court, as long as required notice and redemption periods under the Mortgages Act are followed.

If your lender starts a power-of-sale process, you typically receive a notice of sale and a redemption period — the time during which you can pay the outstanding balance, interest, and costs to stop the sale. If you cannot redeem the mortgage, the lender proceeds to sell the property, and any proceeds above what you owe (after costs) are returned to you. If proceeds fall short, you remain liable for the deficiency.

The practical implication is that you lose control over the sale price and timing. Lenders are required to obtain fair market value, but they are not negotiating for your benefit. If you are in financial difficulty, speaking with your lawyer and lender as early as possible — ideally before default — gives you the most options to sell on your own terms rather than through a lender-directed process.