Mortgage Foreclosure: How to Stop It and Keep Your Home

What Is Mortgage Foreclosure?

A mortgage foreclosure is the legal remedy a lender uses to recover the money it is owed when a homeowner defaults on a mortgage. It is important to know that default and foreclosure are not the same thing. Default simply means you have broken the terms of your mortgage agreement, most often by missing payments. Foreclosure is the formal legal action a lender may take afterward to recover the debt.

In Canada, a lender cannot take your home the moment a payment is missed. There is a structured process with notices, deadlines, and a redemption period along the way. How that process unfolds depends on your province and your mortgage terms. In Ontario, lenders almost always use power of sale, while true judicial foreclosure is more common in provinces like British Columbia and Alberta.

The Three Ways a Lender Can Force a Sale in Canada

When people hear "mortgage foreclosure," they often picture the bank simply taking the house. In reality, a forced sale in Canada usually takes one of three forms. Understanding which one you are facing helps you choose the right response.

Power of Sale

Power of sale is by far the most common route in Ontario. It lets the lender sell your property to recover the debt without taking ownership, so your name stays on the title until the home is sold. Because the courts are not heavily involved, it moves faster than a court foreclosure, which means acting early matters. For the full Ontario process, your redemption window, and the specific ways to stop it, see our dedicated guide on how to stop a power of sale in Ontario.

Judicial Foreclosure

Judicial foreclosure is a court-supervised process. The lender applies to have ownership of the property transferred directly into its name. It usually begins with a Statement of Claim filed in court, and it can take many months or longer. Because it is slow and costly, most Ontario lenders avoid it, and it is used more often in British Columbia, Alberta, and other western provinces.

Tax Sale

A tax sale is different again. Here it is not the mortgage lender forcing the sale but the municipality, acting to recover unpaid property taxes. If property tax arrears are left unresolved long enough, the local government can sell the home to collect what it is owed.

For unpaid property taxes specifically, see our dedicated guidance on property tax arrears.

Foreclosure vs. Power of Sale by Province

The default process varies across Canada, though your specific mortgage terms can affect how a lender proceeds. As a general guide, here is which process is typically used where.

How Many Missed Payments Before Foreclosure in Canada?

There is no single magic number, but there is a clear pattern most Canadian lenders follow. In Ontario, a lender has the right to issue a Notice of Sale once you are more than 15 days late. In practice, most lenders wait until you are roughly 90 days behind, or three consecutive missed payments, before moving toward formal legal action.

Before it reaches that point, you will usually receive several warnings: a reminder, a formal notice of arrears, and then a demand letter requiring full repayment of the overdue amount plus any legal fees. Each stage is a chance to act. The earlier you respond, the more options you keep and the lower the cost.

For a fuller breakdown, read our guide on missed payments before foreclosure and how soon you can lose your house in Canada.

Is It Too Late to Stop Foreclosure?

This is the question most homeowners are really asking, and the answer is usually more hopeful than they expect. At almost every stage before the property actually changes hands, there is still a path to stop foreclosure. Here is a realistic look at where you stand based on how far the process has gone. To understand the finer points, see our guide on when it is too late to stop foreclosure.

How to Stop or Avoid Foreclosure

If you have equity in your home, you usually have more power than you think. The goal is to bring your mortgage back to good standing before a forced sale takes that choice away. Here are the options that genuinely work for Ontario homeowners.

• Refinance your first mortgage to lower your payments and clear the arrears.
• Take out a second mortgage to cover missed payments and legal fees while you stabilize.
• Use a home equity loan to catch up on what you owe and pause the process.
• Arrange private mortgage financing when banks will not approve you in time.
• Have a private lender buy out your mortgage and reset the situation.
• Request a change from foreclosure to power of sale if you have substantial equity and want to sell on your own terms.
• Sell before the forced sale to protect your equity and your credit score.

Our home equity loans, second mortgage options, and mortgage refinancing are all designed to act quickly in time-sensitive situations.

How Much Do You Owe vs. Your Home's Value?

The right solution depends on the gap between what you owe and what your home is worth. If you owe a relatively small amount against a home with strong equity, a focused product like a second mortgage or home equity loan can clear the arrears without disrupting your existing first mortgage. If the numbers are tighter, a refinance or private first mortgage may be the better path. The more precise you can be about your full financial picture, the faster we can match you to the right option.

Your Equity Is Often Your Biggest Asset

Many homeowners in this situation assume the worst: "I am losing my home." The reality is frequently very different. If you have owned for a while or your home has gained value, you may still hold significant equity, and that equity is often what stops foreclosure. Here is a simple illustration of how it works.

That equity can often be used to clear arrears and stop foreclosure. Try our home equity calculator to estimate yours.

Watch: Understanding the Foreclosure Process

A quick overview of how foreclosure works in Canada and the steps you can take to protect your home.

What to Do If You're Already in Foreclosure

If your home is already in danger, the worst thing you can do is nothing. Silence makes the process move faster. Here are the practical steps to take right now.

• Review your budget. List your income and expenses so you understand exactly where you stand and what room there is to free up cash.
• Contact your lender. Many lenders are open to a repayment plan or short-term relief when you reach out early and honestly.
• Get professional help fast. A mortgage broker can find financing your bank will not, often before the redemption window closes.
• Explore financing options now. Refinancing, a second mortgage, or a home equity loan can clear the arrears and stop the process before it finalizes.

Federally regulated lenders are expected to offer support to homeowners in hardship. You can review the official mortgage relief options from the Financial Consumer Agency of Canada.

Why Homeowners Work With LendToday

We specialize in helping Canadians save their homes from foreclosure, quickly. Here is what sets us apart.

Apply Now Talk to a Foreclosure Specialist

Homeowners We Regularly Help

Where a bank focuses on your credit score, we look at the equity in your home and the full picture. We regularly help Ontario homeowners in situations the banks turn away, including those with:

• Bad credit
• Self-employed income
• Low or fixed income
• Pension income
• A recent consumer proposal
• A discharged bankruptcy
• Mortgage arrears
• Property tax arrears
• CRA or Revenue Canada debt
• Multiple mortgages

Being in one of these situations does not guarantee approval, but it is exactly the kind of file we are built to help with. If unsecured debt is part of the picture, see our pages on mortgage arrears assistance and Revenue Canada debt.