A recurring question, usually asked with a particular kind of hurt: "what about my down payment?"
The honest answer is that it is not sitting anywhere waiting to be returned. It went into the property when you bought it, and what happens to it now depends entirely on one thing — whether the property is worth more than what is owed against it.
How it actually works
Your deposit, the principal portion of every payment since, and any increase in the property's value all form your equity. When the property sells, the mortgage, arrears, costs and any other registered claims are paid, and whatever is left is yours.
If that remainder is larger than your original deposit, you receive more than you put in. If the market fell or costs consumed it, you receive less. There is no separate protection for the deposit specifically.
What about the payments I made?
Early in a mortgage, most of each payment is interest rather than principal, so years of payments may have built less equity than people expect. That is how amortisation works, and it surprises people looking back at what they paid.
The principal portion is in the equity, along with the deposit.
What about the renovations?
Only to the extent they increased what a buyer will pay. Some improvements return most of their cost, many return part, and a few return almost nothing regardless of what they cost to do. The market values the house, not the receipts.
The part that should change your behaviour
If your deposit and your equity matter to you — and they should — then the sale price is not an abstraction. It is the number that decides how much of your own money comes back.
Which is the whole argument for influencing the sale rather than letting it happen to you. A properly marketed sale generally produces more than a court-run one, and the difference is not the lender's money. It is your deposit, coming back or not.
If there is nothing left
Then that is a real loss and worth acknowledging honestly. It is also worth knowing early rather than late, because it changes the whole plan — the options when there is no equity are different ones.
Questions people ask
General information about the Alberta foreclosure process — not legal or financial advice, and nothing here guarantees an outcome. Every file is different.