Every mortgage term, explained simply

A variable mortgage where the payment changes as the prime rate changes.

The legal contract that sets out the agreed terms of a home purchase between buyer and seller.

The process of paying off a mortgage over time through regular blended payments of principal and interest.

The total length of time it takes to pay off a mortgage in full through regular payments.

A table showing how each mortgage payment is split between principal and interest over the life of the loan.

The yearly cost of borrowing expressed as a percentage, including interest plus most mandatory fees.

A professional, independent estimate of a property's current market value.

A mortgage that a buyer can take over from the seller, keeping its existing rate and terms.

A lender that serves borrowers who don't fit the strict criteria of prime A lenders.

OSFI's underwriting rules for federally regulated mortgage lenders, including the stress test.

Mortgage payments made every two weeks instead of monthly, often to pay off the loan faster.

Mixing your existing mortgage rate with current rates and resetting the term, often to avoid a prepayment penalty.

A regular mortgage payment that combines both principal and interest into one fixed amount.

Short-term financing that covers the gap between buying a new home and selling your current one.

Tax on the profit from selling a property that isn't your principal residence.

Net operating income divided by property value, used to gauge an investment property's return.

A mortgage that returns a lump sum of cash at closing, usually in exchange for a higher interest rate.

A mortgage with limited prepayment options that charges a penalty if paid off or broken early.

Fees and expenses paid when finalizing a real estate transaction

The day ownership of the property legally transfers and the mortgage funds advance.

Federal agency that provides mortgage loan insurance

Someone who shares full responsibility for a mortgage and is on title.

Property pledged as security for a loan

A mortgage registered as a re-advanceable collateral charge rather than a standard charge.

A lender approval subject to conditions like income verification and appraisal.

A purchase offer that depends on one or more conditions, such as financing or a home inspection.

Monthly fees condo owners pay for shared expenses and reserves.

A mortgage where the down payment is at least 20% of the purchase price

A numerical rating of creditworthiness

The percentage of gross income needed to cover debt payments

Failure to make mortgage payments as agreed

Money submitted with an offer to show good faith, held in trust and credited toward the down payment.

The upfront cash payment made when purchasing a home

A right for someone to use part of a property for a specific purpose, registered against the title.

The difference between a home's market value and outstanding mortgage balance

Funds held by a third party until conditions are met.

A registered account that lets first-time buyers save for a home tax-free.

Someone purchasing their first property.

A mortgage with an interest rate that remains constant.

The distinction between items attached to a home that stay and movable items that do not unless listed.

Legal process where a lender takes possession due to non-payment.

A federal law restricting non-Canadians from buying certain residential property.

Ownership of both a property and the land it sits on, indefinitely and without a time limit.

Percentage of income needed for housing costs.

A signed letter confirming down-payment funds are a non-repayable gift.

A property's price divided by its gross annual rent, used as a quick valuation screen.

A partial rebate of GST/HST paid on a newly built or substantially renovated home.

Someone who agrees to repay a loan if the borrower defaults.

A line of credit secured by home equity.

A mortgage with less than 20% down payment requiring insurance.

A federal tax credit for eligible first-time home buyers.

Professional examination of a property's condition.

A mortgage with less than 20% down that requires mortgage default insurance.

The cost of borrowing money, expressed as a percentage of the loan amount.

A provincial (and sometimes municipal) tax paid when property ownership changes hands.

A rebate reducing or eliminating land transfer tax for eligible first-time buyers.

Owning a property or unit while leasing the land it sits on for a set term.

A financial institution or company that provides the money for a mortgage.

A legal claim registered against a property as security for a debt or obligation.

The ratio of the mortgage amount to the property's value, shown as a percentage.

The date when a mortgage term ends and the loan must be renewed or paid off.

A shared database of properties for sale, used by real estate agents and the public.

A lender that offers only mortgages, usually working through brokers rather than retail branches.

A licensed professional who arranges mortgages between borrowers and multiple lenders.

The legal removal of a lender's charge from a property's title once the mortgage is fully paid off.

Insurance that protects the lender if a borrower defaults on the mortgage.

When unpaid interest is added to the principal, increasing the balance owed instead of reducing it.

A rental property's income after operating expenses but before mortgage costs.

A mortgage that can be paid off at any time without penalty.

Transferring an existing mortgage and its rate to a new property.

Conditional approval for a mortgage before house hunting.

Extra payment toward mortgage principal.

Fee charged for paying off a mortgage early.

The base lending rate banks use to price variable loans.

The original amount borrowed, excluding interest.

A tax rule exempting the gain on your principal residence from capital gains tax.

An individual or company that lends private funds secured by real estate, mainly based on equity.

An annual tax on real estate charged by your municipality.

A lender guarantee locking an interest rate for a set period before closing.

Replacing your existing mortgage with a new one.

Renegotiating your mortgage terms at the end of a term.

How lenders count rental income when qualifying you for a mortgage.

A federal program that lets eligible buyers withdraw money from their RRSP tax-free to help buy or build a qualifying home.

An additional loan secured against a property that already has a first mortgage registered on its title.

A mortgage feature that lets you defer a payment, though interest still accrues and is added to your balance.

A closing document that reconciles prepaid costs and credits between buyer and seller.

A document disclosing a condo corporation's financial and legal status to a prospective buyer.

A federal qualifying rule that requires borrowers to prove they could afford payments at a higher rate than their actual contract rate.

A document that maps a property's boundaries, structures, and any encroachments on the land.

The percentage of your gross monthly income needed to cover housing costs plus all other debt payments.

The length of time your current mortgage contract, rate, and conditions stay in effect before you must renew.

The legal record of who owns a property and any claims or charges registered against it.

A policy protecting against title defects, fraud, and survey or ownership issues.

The point at which a variable-rate mortgage payment no longer covers the interest owed.

The percentage of time or units a rental property sits unoccupied.

A mortgage whose interest rate moves up or down with the lender's prime rate over the term.

A financing arrangement where the seller of a property lends part of the purchase price to the buyer.

Municipal rules governing how a property and its land can be used.