A mortgage default doesn’t end in a sale overnight. Each province sets out steps the lender must follow, and at several points you can still keep the home. This page explains the two systems, the rules in the provinces covered below, and what you can do. Missing payments is covered in what happens when you miss a mortgage payment; mortgage default and arrears data shows how often it happens.
Power of sale vs foreclosure
| Power of sale | Foreclosure | |
|---|---|---|
| Court involvement | None needed; the lender uses a power in the mortgage | The lender applies to court |
| What happens | The lender gives notice, then sells the home | The court sets a redemption period, then orders a sale or gives the lender title |
| Where | Ontario | BC, Alberta, Saskatchewan |
Other provinces use a power of sale, a court process, or either, depending on the province and the mortgage terms. A lawyer in your province can tell you which applies to your mortgage.
Whether the lender can also sue you for a shortfall after the sale depends on the province and the type of mortgage; recourse vs non-recourse mortgages compares the provinces.
Ontario: power of sale
Under Ontario’s Mortgages Act:
- The lender can’t give notice of sale until you have been in default for at least 15 days.
- The home can’t be sold until at least 35 days after the notice.
- At any time before the sale, you can pay the amount in arrears plus the lender’s expenses, and you are then “relieved from the consequences of such default”. You don’t have to repay the whole mortgage.
If the sale doesn’t cover what you owe, the lender can sue you for the difference.
British Columbia: court foreclosure
In BC the lender petitions the court. The court’s order nisi sets a redemption period, during which you can pay off the mortgage, and it includes a personal judgment for what you owe. According to People’s Law School, the default redemption period is 6 months, though the court can shorten or extend it. After that, one of two things usually happens:
- Order for conduct of sale (the usual route): the lender sells the home under court supervision. Any surplus is yours; if the sale falls short, you may have to pay the difference.
- Order absolute: the lender takes title. It then “cannot make any further claims against you”, even if it later sells for less than you owed.
Alberta: court foreclosure
Alberta’s Law of Property Act limits the lender to the property on a mortgage given by an individual: “no action lies … on a covenant for payment”. The court’s order directs that the home be offered for sale; if it doesn’t sell, the court can transfer it to the lender, and the lender’s right to recover any more money ends. The protection doesn’t apply to mortgages given by a corporation, or to high-ratio mortgages insured under the National Housing Act or by a licensed mortgage insurer. With those, you can owe a shortfall.
Saskatchewan
Under Saskatchewan’s Limitation of Civil Rights Act, when a mortgage secures the purchase price of the land, the lender’s right to recover “shall be restricted to the land” and “no action shall lie on the covenant for payment”. The lender can foreclose or sell, but can’t sue you for a shortfall on that mortgage.
Quebec: hypothecary rights
In Quebec a mortgage is a hypothec under the Civil Code. When you are in default, the lender can sell the property itself, have it sold under court supervision, take possession to manage it, or take it in payment of the debt (Éducaloi). First it must send you a prior notice and register it, and the notice must remind you of your right to fix the default. For a home, you have 60 days from registration to surrender it, or 10 days if the lender only wants to take possession to manage it.
How to stop the process
- Catch up the arrears. In Ontario the Mortgages Act lets you do this at any time before the sale. Elsewhere, the lender’s demand letter or the court order tells you what you must pay and by when.
- Talk to your lender early. Federally regulated lenders are expected to offer relief to borrowers in difficulty under the Canadian Mortgage Charter.
- Sell the home yourself before the lender does, so you control the price and keep any equity.
- Refinance with another lender if you have enough equity.
- Deal with your other debts. A consumer proposal covers unsecured debts; the mortgage on your home is left out (OSB), so it can free up money for the mortgage payments but won’t stop the lender if those fall behind. A lawyer or licensed insolvency trustee can explain your options.
Related pages
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- Dial-A-Law (People's Law School): Know your rights if you're facing foreclosure | Dial-A-Law
- Éducaloi: Hypothecs | Éducaloi
- Ontario e-Laws: Mortgages Act