Power of sale in Ontario: how refinancing can stop it, and when to act

Short answer: Yes, refinancing can stop a power of sale in Ontario, as long as it closes before the home is sold. Ontario's Mortgages Act lets you put the mortgage back in good standing by paying the arrears and the lender's costs any time before sale, or you can pay the mortgage out in full ^[1]. A lender can't send a notice of sale until a payment has been in default for at least 15 days, and can't sell for at least 35 days after the notice ^[1]. That window is short, so the earlier you act, the more options you have.

This guide is for Ontario homeowners who have missed mortgage payments, or received a notice of sale, and want to keep the home or sell on their own terms. It explains the timeline, your rights under the Act, and how a refinance, second mortgage or sale can fit. It's general information, not legal advice; a real estate lawyer should review any notice you receive. For broader options, see our debt consolidation mortgage page.

What power of sale means in Ontario

Most Ontario mortgages include a power of sale. If you default, it lets the lender sell the home to recover what's owed, after giving the notice the Mortgages Act requires ^[1]. You stay the owner until the sale closes, and that's why there's still time to fix it.

After a sale, the money is applied in order: sale expenses, then interest and costs, then the mortgage principal, then any later mortgages or charges. Anything left over is paid to you ^[1].

The timeline, step by step

These are the legal minimums. Your mortgage can set longer periods, and the Act doesn't shorten them ^[1]. Mortgages that rely on the Act's built-in power of sale have longer timelines (three months of default and 45 days' notice) ^[1].

On these minimums, the earliest a sale could happen is roughly 50 days after a missed payment. In our experience the process often runs longer than those legal minimums — lenders still have to list and close a sale — but you should plan as if the statutory window is all you have.

Received a notice of sale? A licensed 8Twelve agent can look at refinance and second-mortgage options across 65+ lenders right away, OAC. See your options

Your rights before the sale

• Reinstate the mortgage. Pay the amount actually in arrears plus the lender's necessary expenses, and the default is cured. You don't have to pay the principal that's only due because of the default ^[1].
• Ask for a statement. You can ask the lender in writing for a statement of the arrears and expenses. The lender must answer within 15 days, or its enforcement rights are suspended until it does ^[1].
• Pay out in full. If the notice demands the full balance, the lender must accept payment made as the notice requires. Disputed costs can be assessed by an assessment officer ^[1].

Expect the lender's legal fees and enforcement costs to be added to what you owe. Ask for the statement early so you know the exact number to fund.

How refinancing can stop it

A new lender pays the full balance plus arrears and costs to your current lender, and your mortgage starts fresh. This can work if you still have equity and an income that supports the new payment.

Example (illustrative): home value $650,000; mortgage $410,000; arrears, interest and enforcement costs $14,000. Paying out the mortgage means borrowing about $424,000 plus closing costs, about 65% of value. That's within FCAC's 80% refinance limit ^[4], but you'd still need to qualify.

Recent missed payments can rule out many banks. In that case, the options can include:

• An alternative lender refinance with more flexible credit rules and a higher rate.
• A second mortgage to cover just the arrears and costs, leaving the first mortgage in place once it's reinstated. See how second mortgages work.
• A short-term private mortgage as a bridge. FSRA warns these carry higher costs and need a clear exit plan ^[3]; see our private mortgage exit strategy guide.

Lender approval takes time: an appraisal, documents and a lawyer to close. Starting in the first week after a notice gives the refinance a realistic chance to close inside the window.

Other ways to keep control

• Talk to your lender first. FCAC expects banks to offer tailored relief, such as payment changes or an extended amortization, to borrowers at risk of default on their home ^[2][5].
• Sell on your own terms. If keeping the home isn't realistic, listing it yourself before the lender does can give you more say over price and timing. FCAC notes banks are expected to discuss this option and may waive prepayment penalties when you sell in these circumstances ^[2].
• Get legal advice. A lawyer can check that the notice is valid and explain your rights.

What to do this week

1. Read the notice and note the date it was given and the amount demanded.
2. Request a written statement of arrears and expenses ^[1].
3. Call your lender to ask about relief options ^[2].
4. Gather documents: income proof, your mortgage statement and property tax status (tax arrears can add a second problem; see property tax arrears in Ontario).
5. Talk to a mortgage agent and a lawyer at the same time, so financing and legal steps run together.

A power of sale in Ontario follows a set timeline, and you have rights at every step until the home is sold. Reinstating, refinancing or selling on your own terms can all stop the lender's sale. Acting early gives you the most room. If bad credit is the hurdle, read refinancing with bad credit.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of November 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

8Twelve does not fund second or private mortgages; we arrange them with third-party lenders. Private mortgages carry higher costs; lender and brokerage fees will be disclosed in writing before you commit. The example uses an assumed home value, balance and costs for illustration only, as of November 7, 2026. Mortgages Act timelines checked against Ontario e-Laws (current to November 4, 2026) and FCAC and FSRA materials on November 7, 2026. Speak with a lawyer about any notice you receive.