Crucial Ways to Survive the Redemption Period During Foreclosure: A Guide
Facing a foreclosure notice is one of the most stressful experiences a homeowner can endure. In Ontario, the legal landscape is unique, often blending the concepts of “Foreclosure” and “Power of Sale.” If you have received a Notice of Sale or a Statement of Claim, you are likely entering what is known as the redemption period during foreclosure.
This window of time is not just a waiting period—it is your final opportunity to save your home, protect your equity, and regain financial stability. In this guide, we will break down exactly how the redemption period works, what your rights are in Ontario, and seven actionable steps you can take right now to stop the process.
What is the Redemption Period During Foreclosure?
The redemption period is a specific timeframe granted to a borrower in default to “redeem” their mortgage. To redeem means to pay off the outstanding debt in full, including interest, late fees, and legal costs incurred by the lender.
In Ontario, most lenders prefer the Power of Sale process because it is faster than a judicial foreclosure. However, regardless of the method, the law provides a mandatory waiting period—the redemption period—before the lender can take possession of your home or sell it to a third party.
How Long is the Redemption Period?
Typically, in Ontario, the redemption period is 35 days. This clock starts once the lender has properly served you with a Notice of Sale Under Mortgage. If you are a married couple and the property is a matrimonial home, this period may extend to 40 days.
7 Ways to Survive and Stop the Foreclosure Process
1. Reinstating the Mortgage (Curing the Default)
The most direct way to end the redemption period is to “reinstate” the mortgage. This involves paying all the arrears (missed payments) plus any late fees and the lender’s legal costs.
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Why it works: Under the Ontario Mortgages Act, you have the right to put the mortgage back into “good standing” as long as you do so before the lender has completed a sale or obtained a final order of foreclosure.
2. Refinancing with a Private Lender
If your credit score has dropped due to missed payments, your current bank likely won’t help you. However, Ontario has a robust market of private lenders who focus on the equity in your home rather than your credit score.
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The Strategy: Use a private second mortgage to pay off the arrears or a new first mortgage to “take out” the existing lender entirely. This stops the legal clock instantly.
3. Selling the Property Privately
If you know you can no longer afford the home, selling it yourself during the redemption period is almost always better than letting the bank sell it.
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The Benefit: In a Power of Sale, the lender only cares about recovering their debt. If you sell it yourself, you have better control over the marketing and price, ensuring you walk away with as much of your equity as possible.
4. Filing a “Demand for Notice”
If you receive a Statement of Claim, you have 20 days to respond. By filing a Demand for Notice, you are essentially telling the court and the lender that you want to stay informed about every step of the process.
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The Benefit: While it doesn’t stop the foreclosure, it prevents the lender from taking “default judgment” against you in secret. It buys you time to negotiate.
5. Negotiating a Forbearance Agreement
Believe it or not, many lenders do not actually want to own your house. Foreclosure is expensive and time-consuming for them.
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The Action: Reach out to the lender’s legal counsel or their recovery department to propose a “Forbearance Agreement.” This is a formal plan where you agree to pay a lump sum now and catch up on the rest over a few months.
6. Utilizing the Equity of Redemption
Even after the 35-day redemption period technically “expires,” you still have an Equity of Redemption. In Ontario, you can generally redeem the property at any point until the lender has signed a binding Agreement of Purchase and Sale with a new buyer.
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The Warning: Don’t wait until day 34. The further the process goes, the higher the legal fees become, which you are responsible for paying.
7. Seeking Professional Mortgage Intervention
Navigating the Mortgages Act and court documents is not a DIY project. Working with a mortgage brokerage that specializes in distressed situations is critical. They can bridge the communication gap between you and the lender’s lawyers while securing the “rescue financing” needed to halt the proceedings.
Foreclosure vs. Power of Sale in Ontario
It is important to distinguish between these two, as they affect your redemption rights differently:
| Feature | Power of Sale | Foreclosure |
| Commonality | 95% of cases in Ontario | Very rare |
| Equity | Surplus goes to the homeowner | Lender keeps all equity |
| Court Involvement | Usually none required | Requires multiple court orders |
| Redemption Window | 35 days (minimum) | Can be up to 6 months (judicial) |
Frequently Asked Questions (FAQ)
Can I stop a foreclosure by paying the arrears?
Yes. In Ontario, you have the right to reinstate your mortgage by paying the arrears and the lender’s legal costs at any time during the redemption period.
What happens if I ignore the Notice of Sale?
If you ignore the notice, the 35-day redemption period will lapse. The lender will then apply for a Writ of Possession, which allows the Sheriff to physically remove you from the property so the home can be sold.
Does a consumer proposal stop foreclosure?
A consumer proposal or bankruptcy can provide a “Stay of Proceedings,” but it does not permanently stop a secured creditor (like a mortgage lender) from realizing their security. It may buy you a small amount of time, but you will still need a plan to address the mortgage debt.
How are legal fees calculated?
The lender’s lawyers charge for every letter, phone call, and court filing. These fees are added to your mortgage balance. This is why acting early in the redemption period is vital—waiting only makes the “buy-out” price higher.
Conclusion: Take Control of Your Future
The redemption period during foreclosure is a stressful countdown, but it is also a window of opportunity. Whether you choose to refinance, sell, or reinstate, the key is to act before the 35 days are up.
At Lendtoday, we specialize in helping Ontario homeowners navigate these exact situations. We understand the pressure of the redemption period and have the expertise to secure the financing you need to stop the clock and save your equity. Don’t let the bank decide your future—reach out to us today to explore your options and keep your home.
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