People often use “foreclosure” and “power of sale” interchangeably, but in Ontario they are two distinct legal processes with different outcomes. Here is how they compare.
Power of sale
Under power of sale, the lender exercises a contractual right to sell the property to recover what it is owed. Crucially, any surplus after the debt and costs are paid is returned to the borrower. It is faster, less expensive, and by far the more common process in Ontario.
Foreclosure
In a foreclosure, the lender goes to court to take ownership of the property itself. The lender keeps the property (and any equity in it), but also generally gives up the right to pursue the borrower for a shortfall. It is slower and rarely used in Ontario compared with power of sale.
Which one will I face?
Because power of sale is quicker and lets lenders recover their money without taking on ownership, the vast majority of Ontario mortgage enforcement happens through power of sale.
What it means for your equity
The big practical difference is equity: power of sale can return surplus funds to you, while foreclosure does not. Either way, acting early gives you the best chance to protect what you have built.
How Gurpinder Gaheer can help: Power of Sale Properties in Ontario · Book a free 30-minute consultation
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