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A legal agreement between the buyer and seller outlining the terms and conditions of a property purchase, including the purchase price, closing date, and any conditions.
The total length of time required to repay a mortgage in full through regular payments. A longer amortization can reduce regular payments but generally results in more interest paid over the life of the mortgage.
An assessment of a property’s market value, typically completed by a qualified professional for lending purposes.
The estimated market value of a property determined through a professional appraisal.
A regular mortgage payment that combines both principal and interest. As the mortgage is paid down, the portion going toward principal generally increases while the interest portion decreases.
Short-term financing that helps cover the gap when you purchase a new property before the sale proceeds from your existing property become available.
A Canadian mortgage default insurance provider. Mortgage default insurance protects lenders against losses if an insured borrower defaults on their mortgage.
The Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency and one of the providers of mortgage default insurance for eligible homebuyers.
A legal search of a property’s title that can identify registered ownership, mortgages, liens, easements, and other claims affecting the property.
A mortgage with specific terms and prepayment conditions. Paying off or making payments beyond the permitted prepayment privileges before the end of the term may result in a prepayment charge.
Expenses associated with completing a property purchase. These may include legal fees, land transfer taxes, title insurance, appraisal fees, and other applicable adjustments.
The date when the property transaction is legally completed and ownership is transferred from the seller to the buyer.
An offer to purchase a property that depends on certain conditions being satisfied, such as financing approval, a home inspection, or the sale of another property.
A mortgage where the loan-to-value ratio is generally 80% or less, meaning the borrower has at least 20% equity or down payment.
A calculation used by lenders to determine how much of a borrower’s gross income is required to cover housing and debt obligations.
Money provided by a buyer when making an offer on a property. The deposit is typically held in trust and credited toward the purchase at closing.
The portion of a property that you effectively own. It is generally calculated as the property’s current market value minus the outstanding mortgage and other registered debts.
An offer to purchase a property without conditions attached.
A mortgage where the interest rate remains unchanged for the agreed mortgage term, providing predictable payments during that term.
A legal process through which a lender may seek to recover a debt by taking possession of a property when the borrower defaults on the mortgage.
A measure of the percentage of gross household income used toward housing-related costs, such as mortgage payments, property taxes, heating costs, and applicable condominium fees.
The total qualifying income of all mortgage applicants before deductions such as income tax and other payroll deductions.
A mortgage with a loan-to-value ratio above 80%, typically requiring mortgage default insurance when the borrower meets applicable eligibility requirements.
A professional examination of a property’s condition, including its major systems and components, to help identify potential issues before completing the purchase.
A potential prepayment charge on certain closed mortgages when the mortgage is paid off or significantly prepaid before the end of the term. The calculation depends on the lender’s applicable formula and mortgage terms.
The date on which the current mortgage term ends and the mortgage must be renewed, transferred, refinanced, or paid out according to the applicable terms.
The lender providing the mortgage loan.
The borrower who receives the mortgage financing and provides the property as security for the loan.
Insurance designed to help protect a mortgage balance in the event of the borrower’s death, subject to the policy’s terms, conditions, and exclusions.
The period during which your current mortgage rate, lender terms, and conditions apply. The term is different from the amortization period.
A mortgage that generally provides greater flexibility to make additional payments or pay off the mortgage without the same type of prepayment restrictions associated with a closed mortgage.
How often mortgage payments are made, such as monthly, bi-weekly, accelerated bi-weekly, or weekly.
Moving an existing mortgage from one property to another while keeping some or all of the existing mortgage terms, subject to the lender’s porting rules.
A fee that may apply when you pay off or make certain additional payments toward a closed mortgage beyond your permitted prepayment privileges.
A mortgage feature that allows you to make additional payments toward your principal without incurring a prepayment charge, subject to the specific limits and conditions of your mortgage agreement.
The amount borrowed through a mortgage before interest and other applicable costs.
Insurance coverage that protects the property against eligible risks such as fire and other insured events. Mortgage lenders generally require appropriate property insurance before funding.
Replacing or restructuring an existing mortgage to access additional funds, consolidate debt, change mortgage terms, or use available home equity for purposes such as renovations or investments.
The process of entering into a new mortgage term when your existing mortgage term expires. You may renew with your current lender or explore other available options.
The property or other asset provided as collateral to secure a mortgage loan.
The period covered by your current mortgage agreement and interest rate. Mortgage terms can range from short-term agreements to several years.
The percentage of gross household income required to cover housing expenses plus other debt obligations. Lenders use TDS as part of the mortgage qualification process.
A mortgage where the interest rate can change during the mortgage term based on changes to the lender’s applicable benchmark or prime rate, depending on the mortgage product.
Disclaimer: Mortgage terminology, qualification requirements, insurance rules, and lending policies can vary by lender and may change over time. This glossary is provided for general informational purposes and should not be considered financial or legal advice.