How to Stop a Power of Sale in Ontario: Your Options

What Is a Power of Sale and When Can You Stop It?

A power of sale is a remedy available to mortgage lenders in Ontario when a borrower defaults on their mortgage. The lender can sell the property to recover the outstanding balance without going through foreclosure. The good news: homeowners have several options to stop a power of sale — particularly if they act quickly after receiving the Notice of Sale under Section 22 of the Mortgages Act.

The 35-Day Redemption Period

After receiving a Section 22 Notice of Sale, you have 35 days to redeem the mortgage — meaning you can pay all arrears, interest, and the lender's legal costs in full to stop the process. This is your most straightforward remedy. If you can access funds (from savings, family loans, or other sources) to cover the arrears and costs, paying within the 35-day period immediately stops the power of sale.

Option 1: Refinance or Obtain Private Financing

If you cannot pay the arrears from savings, explore refinancing through a different lender. Many borrowers who are in default with their first mortgage can access private lenders or B-lenders (alternative mortgage lenders) to pay out the defaulted mortgage and buy time to improve their financial situation. Private mortgage financing typically carries higher interest rates but can provide a critical bridge.

Option 2: Sell the Property Yourself

If the power of sale proceeds to completion, the lender will sell the property — often quickly and at a price that maximizes their recovery, not your equity. By selling the property yourself before the lender's sale completes, you control the process and may be able to net higher proceeds, particularly in a strong market. You must act before the lender has completed their sale.

Option 3: Negotiate With the Lender

Many lenders, particularly institutional lenders like banks, prefer to avoid the cost and administration of a power of sale if possible. Contact the lender proactively, explain your financial situation, and explore options including a temporary payment deferral, a repayment plan for arrears added to the mortgage balance, or a loan modification. Lenders are often more receptive to negotiation when approached before the default becomes entrenched.

Option 4: Legal Challenges

A lawyer can review whether the lender has followed all required procedures properly. If the lender has failed to provide proper notice, failed to obtain fair market value for the property, or has proceeded improperly in any way, there may be grounds to challenge or delay the sale. An application to the court for an injunction stopping the sale may be available in appropriate circumstances.