Power of sale listings are rising. Is your client next?

Power of sale listings in Toronto are steadily rising. For agents, that’s not just another headline, it’s a signal that some of their past clients may be in serious trouble, and that the window to help them may already be closing.

Nationally, Canada’s mortgage delinquency rate has also been climbing steadily. According to CMHC, the rate sat at a low of 0.14 per cent in the third quarter of 2022 (Q3). By the fourth quarter of 2025 (Q4), it had reached 0.24 per cent. Ontario saw one of the sharpest increases — from 0.07 per cent in 2022 to 0.27 per cent in 2025.

The trend has a straightforward explanation. From May 2020 through March 2022, the Bank of Canada held interest rates at historic lows to support the economy through the COVID-19 pandemic. The buyers who purchased homes during that window are now reaching their renewal dates and facing a much different rate environment.

Power of sale numbers tell the story

Katie Steinfeld, co-founder and broker of record at On The Block Realty, has noticed the shift firsthand. She’s seen a recent uptick in power of sale listings, an observation that aligns with Teranet data showing power of sale transactions were five times higher in 2025 than in 2022.

Using the PropTx system, Steinfeld tracked sold listings in Toronto where the seller’s name included “bank.” The numbers tell a clear story.

“The number rose from the 34 to 44 range annually between 2020 and 2023, to 70 in 2024 and 109 in 2025,” Steinfeld says. “As of April 27, 2026, we’re already at 40 for the year, which is tracking ahead of last year’s pace.” She added that the actual number of power of sale listings is likely higher, as not all lenders list under a bank name.

Not just more files — different files

Paul Mazza, lawyer at TMA Law, has seen a modest increase in the number of power of sale transactions processed by his firm between Feb. 1 and Apr. 30, comparing 2025 to the same period in 2026. But he says the more telling difference is in how those files are resolving.

Many of last year’s files were paid off — borrowers found new financing or sold their properties on their own terms. That’s no longer the case.

“Today, [there is] little or no redemptions because there is no new financing available and owners cannot sell their properties without large reductions,” Mazza explains.

Today’s market is markedly softer than even a year ago. Home sales are below average, inventory is elevated and residential prices have seen a steady decline. That means proceeds from a power of sale in 2026 may not cover the full mortgage balance, plus real estate commissions and accrued interest. And if they don’t, the shortfall doesn’t disappear.

“If the property is sold for less than the mortgage balance, the borrower remains fully liable for the deficiency,” Mazza says. “Lenders will pursue recovery of any shortfall.”

That recovery can take serious forms — court judgments, wage garnishment, asset seizure and credit bureau reporting.

Options exist, but the window closes fast

Despite the severity of those consequences, Mazza says most lenders are willing to work with borrowers who come forward early.

“Lenders … will often engage with borrowers early following a default to understand the underlying cause,” he says. “Where the default appears to be temporary and the lender is comfortable with its equity position, there is often a willingness to explore solutions such as a payment arrangement, short-term deferrals, capitalization of arrears, or even early renewal options at adjusted rates.”

Melanie Haggerty, mortgage agent at The Mortgage Group, has seen monthly payments jump by as much as $300 to $1,000 upon renewal. For clients who can’t absorb that increase, she says there are tools available, but timing matters.

“We can extend their amortization, increase their income or decrease their spending,” Haggerty says, noting that some clients wait too long. “Had they come sooner [to see me], we could have worked on a strategy such as increasing the size of their monthly payments, extending their amortization or they could have started saving to help buffer the new amounts once their mortgage was up for renewal.”

Mazza echoes that urgency, recommending borrowers reach out to their lender before missing a payment or the moment they suspect one may be coming.

“Borrowers should contact their lender proactively, provide a clear explanation of the situation, and when possible, offer a partial payment along with a realistic proposal to address the arrears,” he says. “Those who delay, avoid communication, or take a reactive approach often find themselves with limited options once enforcement is well underway.”

The advisor’s role in all of this

Steinfeld sees a broader opportunity — and responsibility — for agents.

“The [clients] I worry about are the ones who haven’t started the conversation yet,” she says. “And part of what agents can do, even if it’s not strictly our role, is prompt clients to have these conversations with the experts early. Connecting someone to the right professional before they’re in a position is part of good service.”

She views the current market as a “real recalibration,” for consumers and for the profession.

“The assumption is that real estate always appreciates in any timeframe, and that you can’t go wrong…” she says. “The advisors who are going to be relevant over the next decade are the ones who built their practice around genuine expertise, not market conditions. When the market is doing the heavy lifting, almost any approach works. When it isn’t, competency, knowledge and experience are what differentiates you.”

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