How to stop a power of sale in Ontario

Last reviewed October 2026 · General information, not legal advice

A notice of sale is serious, but it is not the end. Ontario law gives borrowers a window to fix the default, and most power of sale files end without the lender ever selling. This guide walks through the options in the order most people should consider them.

First, know your deadline

Under the Mortgages Act, a lender cannot give a notice of sale until the mortgage has been in default for at least 15 days, and cannot sell until at least 35 days after the notice is given. Your mortgage may set longer periods. Find the date on your notice and count forward 35 days. That is the earliest date the lender can sign an agreement to sell. Use the power of sale calculator to work out the date and what you owe.

In practice, many lenders take longer than 35 days to list and sell. Don't rely on that. Plan around the statutory date.

Option 1: Reinstate the mortgage

Section 22 of the Mortgages Act lets you put the mortgage back into good standing by paying the arrears and the lender's permitted costs. This applies even if the lender has demanded the full balance. Once you pay, the mortgage continues on its original terms, at its original rate.

To do this:

Ask the lender, in writing, for a reinstatement statement. This is different from a payout statement.
Check every charge. Interest on missed payments must be at the contract rate; section 8 of the Interest Act bars a higher penalty rate on arrears. Fees must be permitted by your mortgage, and the legal costs of a notice of sale are capped by regulation.
Pay by certified funds or wire, and get written confirmation that the mortgage is back in good standing.

While the notice period runs, section 42 of the Act generally prevents the lender from taking further enforcement steps, such as starting a lawsuit, so this window matters.

Option 2: Refinance

If you have equity in the home, a new lender may pay out the defaulted mortgage. Banks rarely lend to someone already in default, so this usually means a private or alternative lender, often through a mortgage broker. Private mortgages carry higher rates and lender fees, so treat them as a bridge while you restore your credit, not a long-term solution.

Ask for the payout statement early. A full payout includes the principal, accrued interest, costs and, for a closed mortgage, a prepayment charge. The prepayment penalty calculator gives a rough estimate of that charge.

Option 3: Sell the property yourself

A sale you control almost always brings a better price than a lender's sale, because the lender's priority is recovering its debt, not maximizing your equity. If you can't keep the home, listing it yourself before the lender does protects what equity you have.

Tell the lender you have listed, and send a copy of the listing agreement. Many lenders will hold off while a genuine sale is underway, especially once there is a firm agreement of purchase and sale with a closing date.

Option 4: Negotiate a forbearance agreement

A forbearance agreement is a written deal in which the lender agrees not to enforce for a set time, in exchange for conditions such as a lump-sum payment, a payment plan, or a deadline to refinance or sell. Lenders often agree when you can show a realistic plan and partial payment.

Read the terms closely before signing. Forbearance agreements often include a fee, an admission of the amount owing, and a clause that lets the lender proceed immediately if you miss a condition.

Option 5: Challenge a defective notice

A notice of sale must comply with the Mortgages Act and your mortgage terms. That includes giving notice to the right people, which can include a spouse with rights in a matrimonial home and subsequent mortgagees. It also includes stating amounts accurately. A notice given before 15 days of default, or with seriously wrong figures, may be challenged.

A court can restrain a sale, but judges usually expect the borrower to pay the undisputed amount into court or show a real ability to redeem. A technical defect alone rarely saves the home if the debt is genuinely owed. It may buy time and leverage to negotiate.

What usually does not work

Ignoring the notice. Costs keep growing, and they come out of your equity.
Partial payments without an agreement. A lender can accept a partial payment and still continue enforcing, unless it agrees otherwise in writing.
Assuming bankruptcy stops the sale. Insolvency proceedings rarely stop a secured mortgage lender for long. Speak to a Licensed Insolvency Trustee before relying on this.

A practical checklist

Calculate the 35-day date from the notice.
Request both a reinstatement statement and a payout statement in writing.
Check the charges against your mortgage and the Interest Act.
Decide: reinstate, refinance, sell or negotiate.
Get legal advice before the deadline. The cost of advice is small next to the equity at stake.

This is general information. Every mortgage and every file is different. Speak to an Ontario lawyer or licensed paralegal about your situation before you act.