How Do I Stop a Power of Sale in Ontario Using a Private Lender?

You stop a power of sale in Ontario by paying the lender what it is owed before the sale completes. When a bank will not refinance a borrower already in arrears, a private lender can: it pays out the defaulted mortgage on the strength of the equity in the property and a clear exit, not on credit score or income, and funds within days once both lawyers are ready. Stonefield Capital underwrites these files that way, Ontario-only, and in most cases the exit is a sale the borrower runs themselves. How much equity it takes is the question that decides the file.

How to Stop a Power of Sale in Ontario With a Private Lender: The Short Version

You stop a power of sale by paying the lender what it is owed before the sale completes. If you cannot raise that money yourself, a private mortgage that pays out the defaulted lender does it for you. Be clear about what it is for: in most cases you are not keeping the home. You are buying the months to sell it yourself, at market value and on your own timeline, so that more of the equity ends up in your hand instead of being burned through a lender-run sale. The private lender decides the file on two things, the equity in the property and the exit, not on your credit score or your income, which is why it can say yes when a bank has already said no. In most cases Stonefield Capital issues terms within a day of a complete file and funds in as little as 48 hours once both lawyers are ready.

If you have received a Notice of Sale, do these five things today:

Do not ignore the notice. The clock started the day it was served.
Ask the lender's lawyer for a payout statement. You need the exact figure: arrears, interest, and the lender's costs.
Retain a real estate lawyer now. Legal preparation, not underwriting, decides whether a refinance closes in time.
Work out your equity. Recent sales of similar homes nearby, less everything registered against the property. The equity has to cover the payout, the cost of carrying the property to the exit, and a cushion; this guide walks through the arithmetic.
Talk to a lender that can fund inside the window. Homeowners can start at stonefieldcapital.ca/borrowers/stop-power-of-sale or call (416) 371-2077; brokers submit through the deal submission page.

What Is a Power of Sale in Ontario?

A power of sale is a lender's statutory right to sell mortgaged property when a borrower defaults, without a court order. Power of sale differs from foreclosure: the borrower keeps any sale surplus above the debt, but loses control of the sale process. The governing legislation is the Mortgages Act, R.S.O. 1990.

How Much Time Does a Borrower Have to Redeem?

Ontario's Mortgages Act requires lenders to serve a Notice of Sale and then wait a minimum redemption period before completing the sale. For residential properties with five or fewer units, that period is 35 days from service of the notice. The borrower can redeem (pay the full arrears, costs, and legal fees) at any point before the sale closes.

Acting early preserves the most options. Every week of delay narrows the window for arranging refinancing.

What If the 35 Days Have Already Passed?

The redemption period is the minimum the lender must wait before taking steps to sell; it is not the last day you can act. Until the lender has actually sold the property (in practice, until it has signed a binding agreement of purchase and sale) you can still pay out the arrears or the whole mortgage, and a refinance can still close. The lender may also start a court action for possession in parallel; that does not by itself end your right to redeem. What changes after the 35 days is the margin: the lender can list the property at any point, so a file that arrives late needs a lawyer engaged the same day. Get a lawyer's read on exactly where your file stands before assuming it is too late.

Why Does a Private Lender Help When a Bank Won't?

Banks and credit unions underwrite on income, credit score, and stress-test qualification. A borrower in power of sale often fails all three criteria. Private lenders like Stonefield Capital underwrite primarily on equity and exit strategy (the ability to repay or refinance at term end), so a temporary income disruption or bruised credit does not automatically disqualify a file.

What Does Stonefield Capital Look At to Approve the File?

Equity position: Stonefield underwrites to loan-to-value; pricing is based on LTV and mortgage position. Current rate ranges are published at stonefieldcapital.ca/private-mortgage-rates.
Exit strategy: How will the borrower repay or refinance at the end of the private term (typically 1–12 months)?
Property type and condition: Stonefield lends across Ontario on residential, mixed-use, and select commercial properties.
CRA arrears: A Notice of Assessment is always requested to confirm no large Canada Revenue Agency debt that would rank ahead of the mortgage.
Income: Not what decides the file. There is no income test and no minimum credit score; the two things that matter are the equity and the exit.

No minimum credit score applies. The focus is equity and a realistic path out.

Step 1 — Submit the File Immediately

Send the power of sale notice, current mortgage statement, recent property tax statement, and any existing appraisal or comparable sales data to Stonefield Capital. Brokers can use the broker portal or contact the underwriting team directly. The sooner the file arrives, the more calendar days remain before the redemption deadline.

Step 2 — Receive a Term Sheet

Stonefield typically issues a term sheet within 24 hours of receiving a complete submission. The term sheet confirms loan amount, rate, fees, and conditions. Borrowers and brokers should review all conditions immediately and begin satisfying them in parallel, not sequentially.

Step 3 — Engage Legal Counsel on Both Sides

The borrower must retain independent legal counsel to receive and review mortgage documents. Stonefield's lawyers prepare the commitment and registration documents once the term sheet is accepted. Funding in as little as 48 hours is possible when both sides have legal counsel ready; the bottleneck in power-of-sale situations is nearly always legal preparation, not underwriting.

Step 4 — Fund and Discharge the Arrears

On closing, Stonefield advances the mortgage proceeds directly to discharge the arrears, penalties, and legal costs claimed by the existing lender. The power of sale is stopped the moment those funds clear and the existing lender confirms redemption. The borrower then holds a new private mortgage registered on title, with a defined term to arrange longer-term refinancing.

What Does Stopping a Power of Sale Cost?

Three sets of costs, all of which come out of the new mortgage or the equity, so the file has to carry them:

The payout. The existing lender's arrears and interest, plus the legal and enforcement costs it has added, as stated on its payout statement.
Your own lawyer. Required on every mortgage; retaining one early is also what makes a fast close possible.
The new mortgage. A lender fee, a broker fee, legal fees, and interest-only payments for the term. Stonefield's current rate ranges by loan-to-value are published at stonefieldcapital.ca/private-mortgage-rates; the exact figures for a file are in the commitment letter before anyone signs.

A private mortgage costs more than the bank mortgage it replaces. It is worth it when the alternative is a lender-controlled sale that leaves the surplus, and the timing, to someone else.

This Only Works If You Sell It Yourself

Be clear about what a power-of-sale refinance is for. In most cases it is not a way to keep the house; it is a way to stop being the person who loses control of the sale. Under a Notice of Sale the lender lists the property on its own schedule, and every week of arrears, interest and enforcement cost comes off your equity before you see a dollar. A private mortgage pays that lender out, stops the clock, and gives you the months to sell the property yourself at market value, with an agent and a lawyer you chose. The point is to end up with more money in your hand than the lender's sale would have left you. If the numbers do not show that, because the private mortgage's fees and interest would eat the difference, it is usually not worth doing, and Stonefield will say so in the first response rather than write a mortgage that only delays the same outcome. Keeping the home by refinancing back to a bank does happen, but it is the exception: it needs income that has genuinely recovered and a bank willing to take the file at the end of the term, so it has to be a real plan, not a hope.

What Happens After the Power of Sale Is Stopped?

The private mortgage term (typically 1 to 12 months) gives the borrower time to sell the property at full market value on their own terms, which is the usual exit, or, less often, to stabilize income, repair credit and requalify with an institutional lender. Because a Stonefield private mortgage is registered on title but not reported to credit bureaus, it does not directly move a credit score. Clearing the high-interest arrears and defaulted mortgage typically improves the borrower's credit profile over the following 1 to 12 months, which strengthens the exit.

Does Stonefield Capital Need an Appraisal?

In most cases, no formal appraisal is required. Stonefield runs its own comparable-sales analysis, which saves the borrower the appraisal fee and several days of processing time. If an appraisal is needed, Stonefield flags that requirement in the initial response, never at commitment or the last minute.

Is Stonefield Capital Licensed to Do This?

Stonefield Capital Inc. is a licensed mortgage brokerage in Ontario (FSRA Brokerage Licence #13722). Stonefield Mortgage Administration Inc. holds a separate mortgage administrator licence (FSRA #13636). All lending activity is Ontario-only and governed by the Mortgage Brokerages, Lenders and Administrators Act, 2006.

Frequently Asked Questions

How fast can a private lender actually stop a power of sale in Ontario?

Stonefield Capital can typically issue a term sheet within 24 hours of a complete file submission. Funding in as little as 48 hours is possible once both the borrower and Stonefield have legal counsel ready to proceed. In a power of sale, the bottleneck is almost always legal preparation, not underwriting. Submit the file as early as possible; every day of the redemption period matters.

What is the minimum equity needed to stop a power of sale with Stonefield?

Stonefield Capital does not publish a single minimum equity threshold, because pricing and approval are based on loan-to-value relative to the property and its position in the mortgage stack. The test is whether the equity left after everything owed is paid covers the payout, the carrying cost through the exit, and a cushion for what goes wrong; How Much Equity Do You Need to Stop a Power of Sale in Ontario? works through it with the figures. Visit stonefieldcapital.ca/private-mortgage-rates for current LTV-based rate ranges, or submit the file for a direct assessment.

Can Stonefield lend if the borrower has bad credit or a recent bankruptcy?

Yes, in most cases. Stonefield Capital has no minimum credit score requirement and underwrites primarily on property equity and exit strategy. A recent consumer proposal, bankruptcy discharge, or collection accounts on file does not automatically disqualify a borrower. A Notice of Assessment is always reviewed to confirm there are no large CRA arrears that would take priority over the mortgage charge.

Will a private mortgage to stop the power of sale hurt the borrower's credit score?

A Stonefield private mortgage is registered on title but not reported to the credit bureaus, so it does not directly change the borrower's credit score. However, clearing the existing defaulted mortgage and any high-interest arrears typically improves the borrower's overall credit profile over the following 1 to 12 months, which matters most for qualifying with an institutional lender at the end of the private term.

I'm the homeowner, not a broker. How do I start?

Tell Stonefield about the situation at stonefieldcapital.ca/borrowers/stop-power-of-sale or ask for a call back on any page of the site; a Stonefield-approved mortgage broker calls within one business day. If a Notice of Sale has already been served, phone (416) 371-2077 instead of waiting. Have the notice, the latest mortgage statement, and the lender's payout figure ready. Stonefield Capital is a licensed mortgage brokerage (FSRA #13722), so the file is placed and documented the way any mortgage would be.

What documents does a broker need to submit a power of sale deal to Stonefield?

A complete submission typically includes: the power of sale or Notice of Sale served on the borrower, the current mortgage statement showing arrears, a recent property tax statement, and any existing appraisal or MLS comparable data. Notice of Assessment for the borrower is always requested. Income documents are not what decides the file; the equity and the exit are. Submit what is available and underwriting will confirm any outstanding items.