In Ontario, a lender must serve a Notice of Sale before proceeding under power of sale, and you generally have a redemption period of at least 35 days from that notice in which to bring the mortgage current. Refinancing, a second mortgage or a private first mortgage can cure the arrears, but options narrow sharply as the process advances. Acting early costs far less than acting late.
If you have received a Notice of Sale or any court document, speak to a lawyer promptly. Timelines are strict and rights can be lost by waiting. Nothing on this page is legal advice.
Roughly how the process runs
General outline only. Exact timing depends on your mortgage contract, your lender and your circumstances.
| Stage | Roughly when | What it means |
|---|---|---|
| Missed payments | Day 1 onward | Late charges apply; lender begins contacting you |
| Default acknowledged | Often around 3 months | Lender formally treats the mortgage as in default |
| Notice of Sale served | After default period | Formal notice under the Mortgages Act; the clock starts |
| Redemption period | Generally 35+ days from notice | You can still bring the mortgage current |
| Enforcement proceeds | After redemption expires | Lender moves toward sale of the property |
The redemption period is the important window. It is a legal right, not a favour, and it exists precisely so homeowners can arrange a solution.
Why every week matters
Early on, the arrears are a number that can be paid. As the process advances, the payout figure grows to include accumulated interest, the lender’s legal costs and enforcement expenses — and lender appetite changes too.
A file with two months of arrears and a clear explanation is straightforward to place. The same file under active enforcement, with legal costs added and a deadline in days, is materially harder and more expensive. The most costly decision available here is usually waiting.
What may still be possible
- A payment arrangement with your existing lender. Ask first — it costs nothing and some lenders will accept one.
- A second mortgage to bring the arrears current, leaving your first mortgage in place.
- Refinancing the first mortgage entirely, where qualification allows.
- A private first mortgage that pays out the mortgage in default, buying time to restructure properly.
- Selling on your own terms. Not what anyone wants, but a controlled sale almost always realises more than an enforced one, and preserves your remaining equity.
What lenders look at on an arrears file
Equity first — there has to be enough room to cover the arrears, the costs and a margin. Then: what caused the arrears, whether that cause has passed, whether income supports the payments going forward, and whether there is a credible plan.
A resolved, explainable cause — an illness, a job loss since recovered, a business interruption now behind you — is treated very differently from an ongoing shortfall. Be straightforward about which it is. It changes which lenders will look at the file, and it is obvious quickly either way.
What it is likely to cost
Arrears files typically involve second-position or private financing: a higher rate, plus lender and brokerage fees, legal, appraisal and registration. Where enforcement has begun, the lender’s legal costs are added to the payout figure.
Weigh that against the alternative. Losing the property under power of sale generally realises less than a controlled sale, and the shortfall can remain your responsibility. Expensive borrowing that preserves equity can still be the cheaper outcome — but only if the payments are genuinely sustainable afterwards.
Risks to be honest about
- Borrowing to cure arrears does not fix an underlying income shortfall. If the payments were not affordable before, they may not be now.
- Private financing costs more and terms are short; renewal is not guaranteed.
- Fees on urgent files can be significant.
- Missed payments on the new arrangement escalate quickly.
- Final approval always depends on the complete application and lender review.
Where the difficulty runs deeper than this one mortgage, obtain independent advice from a Licensed Insolvency Trustee before borrowing further against the home. That consultation is normally free and it is worth having.
What to do this week
- Open the letters. Establish exactly what stage you are at.
- Call your lender and ask what arrangement they would accept.
- If a Notice of Sale has been served, speak to a lawyer.
- Gather your mortgage statement, property tax bill and insurance.
- Get an honest read on whether the payments are affordable going forward.
- Speak to a broker who works with arrears files — and ask them directly whether they think borrowing is the right answer for you.
Frequently asked questions
How long do I have once I receive a Notice of Sale?
Generally at least 35 days from the notice as a redemption period, though exact timing depends on your mortgage and circumstances. Confirm your specific position with a lawyer — do not rely on a general figure.
Can I still get a mortgage while in power of sale?
Sometimes, where there is sufficient equity and the file can be placed with a lender working in this space. It cannot be promised, and approval always depends on the full circumstances and lender review.
Will this stay on my credit report?
Missed mortgage payments are reported and affect credit for some years. Curing the arrears stops further damage and begins the recovery, but does not erase the history.
Is power of sale the same as foreclosure?
They are different processes. Power of sale is the far more common route in Ontario and allows the lender to sell the property without taking ownership. A lawyer can explain how each applies to your situation.
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• A lawyer — essential once any notice or court document is received
• FSRA — the public register: fsrao.ca
This page is general education about mortgage options in Ontario. It is not legal, accounting, tax or insolvency advice, and it is not an offer of credit. Please seek independent professional advice for your own situation.