Power of sale listings in Toronto are on the rise. For real estate agents, this is more than a headline — it signals that some former clients could be facing serious financial stress, and the opportunity to help them may be closing quickly.
Across Canada, mortgage delinquency rates have trended upward. According to the Canada Mortgage and Housing Corporation (CMHC), the national delinquency rate rose from 0.14% in the third quarter of 2022 to 0.24% by the fourth quarter of 2025. Ontario experienced one of the steepest increases, moving from 0.07% in 2022 to 0.27% in 2025.
The explanation is clear. Between May 2020 and March 2022, the Bank of Canada kept interest rates at historically low levels to support the economy during the COVID-19 pandemic. Buyers who purchased homes during that period are now reaching mortgage renewal dates and confronting a very different interest-rate environment.
Power of sale numbers tell the story
Katie Steinfeld, co-founder and broker of record at On The Block Realty, has observed this shift directly. She reports an increase in power of sale listings that mirrors Teranet data showing power of sale transactions were five times higher in 2025 than in 2022.
Using the PropTx system to track sold listings in Toronto where the seller’s name included “bank,” Steinfeld found a clear progression: annual listings rose from the mid-30s to mid-40s between 2020 and 2023, jumped to 70 in 2024 and reached 109 in 2025. As of April 27, 2026, she had already recorded 40 such listings, ahead of the prior year’s pace. She notes the true total is likely higher because not all lenders register under a bank name.
Not just more files — different files
Paul Mazza, a lawyer at TMA Law, reports a modest increase in power of sale matters handled by his firm between Feb. 1 and Apr. 30 when comparing 2026 to 2025. The bigger difference, he says, is in how those files are concluding.
Last year many borrowers were able to redeem their mortgages by finding new financing or selling on favorable terms. That option is far less common today.
“There is little or no redemption now because new financing is hard to secure and owners cannot sell properties without substantial price reductions,” Mazza explains.
The market has softened compared with a year ago: sales are below average, inventory is elevated, and prices have declined. Proceeds from a 2026 power of sale may not cover the outstanding mortgage balance, real estate commissions and accrued interest. If a property sells for less than the mortgage, the borrower remains liable for the deficiency.
“Lenders will pursue recovery of any shortfall,” Mazza says. That recovery can include court judgments, wage garnishment, asset seizure and negative reporting to credit bureaus.
Options exist, but the window closes fast
Despite the seriousness of those consequences, Mazza says many lenders are open to working with borrowers who engage early.
“Lenders often reach out or will engage with borrowers early after a default to understand the underlying cause,” he says. “When the default appears temporary and the lender is comfortable with its equity position, they will frequently explore solutions such as payment arrangements, short-term deferrals, capitalization of arrears, or early renewal options at adjusted rates.”
Melanie Haggerty, a mortgage agent at The Mortgage Group, notes that monthly payments at renewal have increased substantially for some clients — sometimes by $300 to $1,000. For those unable to absorb the higher payments, there are strategies available, but timing is critical.
“We can extend amortization, adjust income assumptions, or identify ways to reduce spending,” Haggerty says. She cautions that some clients wait too long; earlier conversations would have allowed options such as increasing monthly payments gradually, extending amortization or building savings to buffer higher renewal amounts.
Mazza stresses the same urgency: borrowers should contact their lender before missing a payment or as soon as they suspect trouble. Proactively explaining the situation and, where possible, offering a partial payment with a realistic plan to address arrears can create room for workable solutions. Those who delay or avoid communication often face far fewer options once enforcement steps are underway.
The advisor’s role in all of this
Steinfeld sees both an opportunity and a duty for agents to act. Many at-risk clients have not yet begun the conversation with lenders or mortgage professionals.
“The clients I worry about are the ones who haven’t started the conversation yet,” she says. “Part of what agents can do — even if it isn’t strictly our formal role — is prompt clients to speak with appropriate experts early. Connecting someone with the right professional before they reach a crisis is part of good service.”
She describes the current market as a “real recalibration” for consumers and for the industry. The long-held assumption that real estate always appreciates and that one cannot lose has been challenged. According to Steinfeld, the advisors who will remain relevant in the coming decade are those who build practices on genuine expertise rather than relying on favorable market conditions. When the market no longer does the heavy lifting, competency, knowledge and experience become the differentiators.