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A recourse mortgage is a mortgage under which the lender can pursue the borrower personally for any shortfall remaining after a defaulted property is sold, rather than being limited to recovering only the property itself — the default legal position across most of Canada.
Alberta and Saskatchewan carve out a partial non-recourse protection under their own provincial property law for certain conventional, uninsured residential mortgages, generally requiring at least a 20% down payment. If a borrower defaults on a qualifying mortgage in one of these two provinces, the lender's recovery is limited to the property itself, with no separate claim against the borrower for a deficiency.
This exception does not extend to insured mortgages — a mortgage backed by CMHC, Sagen, or Canada Guaranty remains recourse everywhere in Canada, including Alberta and Saskatchewan, since the insurer, not just the lender, has a claim on any deficiency. Brokers structuring a low-down-payment or insured deal in Alberta or Saskatchewan shouldn't assume the local non-recourse protection applies, and should confirm loan type and insurance status before advising a client on default risk.
General rule is full recourse: outside Alberta's and Saskatchewan's narrow exceptions, a lender across Canada can pursue a defaulting borrower for any shortfall after selling the property through a judicial sale or power of sale.
Alberta and Saskatchewan carve-outs: these two provinces limit recourse on certain uninsured, conventional residential mortgages, generally requiring a minimum 20% down payment, so the lender's remedy is limited to the property itself.
Insured mortgages stay recourse everywhere: link insured mortgage — a mortgage insured by CMHC, Sagen, or Canada Guaranty remains fully recourse in every province, since the insurer can pursue the borrower for a claim it pays out.
Affects how default is resolved: link judicial sale — whether a mortgage is recourse or not shapes what happens after a judicial sale or power of sale leaves a shortfall, which is a material risk difference for borrowers and lenders alike.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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