Accrued Interest

The amount of interest you owe on your mortgage from the date of your last payment to the date of this inquiry. Accrued interest will be included and paid with your next regular payment.


Actual Months Remaining

The number of months in which your mortgage will be repaid.


Agreement of Purchase and Sales

An Agreement of Purchase and Sale is a written contract between a seller and a buyer for the purchase and sale of a particular property. In the Agreement, the buyer agrees to purchase the property for a certain price, provided that the terms and conditions are satisfied.

Amortization Period

The number of years it takes to repay the entire amount of financing is based on a set of fixed payments.


The process of determining the market value of a property.


What you own or can call upon. Often used in determining net worth or in securing financing.

Assumption Agreement

A legal document signed by a buyer that requires the buyer to assume responsibility for the obligations of an existing mortgage. If someone assumes your mortgage, make sure that you get a release from the mortgage company to ensure that you are no longer liable for the debt.


Blended Payments

Equal payments consisting of both an interest and a principal component. Typically, while the payment amount does not change, the principal portion increases, while the interest portion decreases.

Bridge loan

A bridge loan is a short-term loan. You may need a bridge loan if you own a home, but need funds from the value of your existing home to close a deal on a new one. This loan is usually only available if you already have a signed, unconditional sale offer on your current home.



Cash-back mortgage

With a cash-back mortgage, you get the mortgage principal and a percentage of the mortgage amount in cash. The interest rates on these mortgages are higher than on some other mortgages. You may want a cash-back mortgage if you need money for expenses such as new furniture or repaying loans to cover closing costs.


Canada Mortgage and Housing Corporation (CMHC)

CMHC is a federal Crown corporation that administers the National Housing Act (NHA). Among other services, they also insure mortgages for lenders that are greater than 80% of the purchase price or value of the home. The cost of that insurance is paid for by the borrower and is generally added to the mortgage amount. These mortgages are often referred to as “High-Ratio” mortgages.

Closed Mortgage

A mortgage that cannot be prepaid or renegotiated for a set period of time without penalties.

Closing Costs

Closing costs are expenses you pay to close a property purchase and sale. As the buyer, your closing costs include land transfer tax, legal fees and any costs the lawyer pays on your behalf, such as title insurance, survey costs, courier charges, among others. The seller's closing costs include real estate commission (if applicable), legal fees and any costs their lawyer pays on the seller's behalf.

Closing Date

The date on which the new owner takes possession of the property and the sale becomes final.


If 2 or more people are borrowers on a mortgage, they are co-borrowers (also known as Co-Applicants).



An asset, such as a deposit, Canada Savings Bond, or automobile, that you offer as security for a loan.

Collateral Charge

A charge, or mortgage, is the document registered on title to secure a loan. A collateral charge may secure more than one loan or line of credit.


Conventional Mortgage

A mortgage of up to 80% of the purchase price or the value of the property. A mortgage exceeding 80% is referred to as a “High-Ratio” mortgage and the lender will require insurance for that mortgage.

Credit Report

A credit report is a record of your credit history. Data includes current and past financial debts, up to 7 years, and a record of debt-repayment. A lender uses a credit report, among other details, to decide whether to accept or deny your mortgage application. Lenders get credit reports from credit bureaus, like Equifax and TransUnion.


Credit Score

A system that assesses a borrower on several items, assigning points that are used to determine the borrower’s creditworthiness.

Creditor Insurance

Creditor insurance can cover your mortgage payments, or reduce or pay off your mortgage in the event of death, critical illness, disability or job loss.



Debt ratios (also called debt service ratios)

Debt ratios measure your ability to repay a mortgage by ensuring debt doesn't exceed a certain percentage of your income. Lenders and mortgage insurers use 2 debt-service ratios to determine if you qualify for a mortgage: gross debt service ratio (GDS) and total debt service ratio (TDS).


A deed is a legal document written and signed by the seller. It transfers property ownership from the seller to the buyer.


A sum of money deposited in trust by the purchaser on making an offer to purchase. When the offer is accepted by the vendor (seller), the deposit is held in trust by the listing real estate broker, lawyer, or notary until the closing of the sale, at which point it is given to the vendor. If a house does not close because the purchaser failed to comply with the terms set out in the offer, the purchaser forgoes the deposit, and it is given to the vendor as compensation for the breaking of the contract (the offer).

Down payment

A down payment is the amount of money, including the deposit, you put towards the purchase price of a property. Minimum down payments vary from 5% to 20%.. If your down payment is less than 20% of the property value, your mortgage is high-ratio and you need mortgage default insurance.



The difference between the market value of the property and any outstanding mortgages registered against the property. This difference belongs to the owner of that property.


First Mortgage

A debt registered against a property that has first priority on that property.

Fixed-Rate Mortgage

A mortgage for which the interest is set for the term of the mortgage.


Gross Debt Service Ratio (GDS)

This is a mathematical calculation used by lenders to determine a borrower’s capacity to repay a mortgage. It takes into account the mortgage payments, property taxes, approximate heating costs, and 50% of any maintenance fees, and this sum is then divided by the gross income of the applicants. Ratios up to 32 % are acceptable.

Gross Household Income

Gross household income is the total income, before deductions, for all people who live at the same address and are applicants on a mortgage.


A guarantor is also used to help a primary borrower. However, in this case, the primary borrower usually has the income to support the mortgage but may have credit issues that prevent them from securing the loan on their own. A guarantor doesn’t have the same property rights as a co-signer since their name is only on the mortgage and not on the title of the property. Their role is strict to guarantee that the mortgage payments can be made in order to get mortgage approval.


High-Ratio Mortgage

A mortgage that exceeds 80% of the purchase price or appraised value of the property. This type of mortgage must be insured. To avoid the cost of the insurance, a 1st mortgage up to 80% is arranged and a 2nd mortgage for the balance (up to 90% of the purchase price).

Home Equity Line of Credit (HELOC)

A home equity line of credit (HELOC) is a revolving line of credit that allows you to borrow the equity in your home at a much lower interest rate than a traditional line of credit. By taking out a mortgage with a HELOC feature, you’ll have access to a pre-approved amount of cash within your mortgage. When you use the money from a HELOC, you’ll have to pay the interest on it on top of your regular mortgage payments.

Home Buyers' Amount (HBA) for first-time homebuyers

The federal HBA may provide a non-refundable tax credit for first-time homebuyers. The federal tax credit rate is 15%, so claiming the $5,000 HBA could lower your income tax by $750. You can generally claim the HBA if you or your spouse or common-law partner acquired a qualifying home, provided you didn't live in a home that either of you owned in the year the home was acquired or the prior 4 years.

Home Buyers' Plan (HBP)

The Home Buyers' Plan (HBP) is a Canadian government program. It lets eligible individuals1 withdraw up to $35,000 each from their Registered Retirement Savings Plan (RRSP) to buy, build or maintain a qualifying home. You don’t have to pay income tax on the funds as long as you repay the full amount you withdraw from your RRSP over the next 15 years. If the full $35,000 is withdrawn, the minimum annual repayment is just $2,333. Conditions apply.

Eligible individuals are:

first-time home buyers and their spouse or partner; or

those living separately and apart from a spouse or common-law partner for at least 90 days and started living separately and apart in the preceding 4 years as a result of a relationship breakdown.

Home Equity

Your home equity is the value of your home, minus total outstanding debt — such as mortgages and liens — registered against title to the property. Calculate as follows:

Property value – total debt secured by the property = home equity

Example: If your property is worth $500,000 and the mortgage is $400,000, your home equity is $100,000 ($500,000 - $400,000 = $100,000).

Your home equity increases as the debt secured by the property decreases.

Home Inspection

Buyers, sellers, owners or anyone who needs independent information about a property can hire a Registered Home Inspector (RHI) to do a home inspection.

The inspection confirms a home's condition, identifies needed repairs and helps you decide whether to buy a property. Lenders may ask for a home inspection report when you apply for a mortgage.



Interest is the money you pay to your lender for using the funds you borrow. Interest is charged from the day you get the money. That day is known as the funding date


Interest Adjustment Date (IAD)

The date on which the mortgage term will begin. This date is usually the first day of the month following the closing. The interest cost for those days from the closing date to the first of the month are usually paid at closing. 

Interest-Only Mortgage

A mortgage in which only the interest cost is covered in each payment. The full principal remains outstanding. The payment is lower than an amortized mortgage since you are not paying any principal until the term is over.

Interest Rate Differential (IRD)

The interest rate differential (IRD) is a type of prepayment charge you may pay to your lender when you pay all or part of the mortgage before the term ends. For fixed-rate closed mortgages, prepayment charges are usually 3 months interest or the IRD, whichever is greater. Your mortgage document explains how the IRD is calculated.


Land Transfer Tax

Land transfer tax is a closing cost you pay the government on your closing date. The tax is calculated based on the property's purchase price. Most provinces charge a provincial land transfer tax and some cities charge an additional municipal land transfer tax. Taxes vary by province and first-time homebuyers are sometimes exempt from part of the cost. Find more details about the land transfer tax on provincial and municipal websites.

Legal Fees and Disbursements

Legal fees and disbursements are part of the closing costs. Buyers and sellers pay them to their lawyers or notaries to close a purchase, sale or mortgage transaction. These fees vary by province and are subject to GST or HST. You should review all fees and other costs associated with your legal services


Maturity Date

The maturity date is when your mortgage term ends. This is when you either renew your mortgage for a new term, if your lender agrees, or pay it off completely.



A mortgage is a loan that uses real estate as security. Once that loan is paid-off, the lender provides a discharge for that mortgage.


The financial institution or person (lender) who is lending the money using a mortgage.


The person who borrows the money using a mortgage.

 Mortgage Broker

A mortgage broker works on your behalf and searches for the best mortgage deal among various lenders. When you accept a mortgage, the broker completes the application and applies for the loan on your behalf.

Mortgage Payment (also called regular payment amount)

Mortgage payments are the regular payments you make to repay your loan. Payments can be monthly, semi-monthly, biweekly or weekly. They include principal and interest.

Mortgage Pre-Approval

With mortgage pre-approval, you're asked questions that closely match those of a full mortgage application. Your Broker does a credit check. Your Broker pre-approves you for a maximum amount, which is subject to several conditions. This lets you know how much money a lender may lend you, but it doesn't guarantee final approval.

Mortgage Statement

You get a written record of your mortgage status, often on an annual basis, from your lender. The statement includes how much you paid in principal and interest to date, plus the remaining principal on the mortgage.

Multiple Listing Service (MLS)

Multiple Listing Service (MLS) is a database of real estate listings where realtors advertise and search for properties for sale on behalf of clients.


Open Mortgage

A mortgage that can be repaid at any time during the term without any penalty. For this convenience, the interest rate is between 0.75-1.00% higher than a closed mortgage. A good option if you are planning to sell your property or pay-off the mortgage entirely.

Outstanding Principal

The amount of the mortgage loan owed as of today's date. This does not include interest that has accrued since your last mortgage payment.


Payment Due Date

The date your next regular payment is due.

Payment Frequency

How often you regularly pay your mortgage. (e.g. weekly, bi-monthly, etc...)

By paying more frequently and with an accelerated payment, you can pay off your mortgage sooner.

Portable Mortgage

An existing mortgage that can be transferred to a new property. One would want to port their mortgage to avoid any penalties, or if the interest rate is much lower than the current rates.

Prepayment (also called lump-sum payment)

A prepayment is when you pay off some or all of the mortgage before the term ends. You can pay off most open mortgages without paying a prepayment charge. When you prepay a closed mortgage, you usually pay a prepayment charge to your lender. But most closed mortgages let you make an annual prepayment of 10% to 20% without a charge.

Prepayment Penalty or Prepayment Charge

A fee is charged to the borrower by the lender when the borrower prepays all or part of a mortgage over and above the amount agreed upon. Although there is no law as to how a lender can charge you the penalty, a usual charge is the greater of the Interest Rate Differential or 3 months interest.


The lowest rate a financial institution charges its best customers.


The original amount of a loan, before interest.


Rate Commitment

The number of days the lender will guarantee the mortgage rate on a mortgage approval. This can vary from lender to lender anywhere from 30 to 120 days.


A mortgage renewal is when your current term comes to an end and you sign on for a new term. This is an opportunity for you to renegotiate the terms of your mortgage contract, including the length of your next term, your mortgage interest rate, and even your lender

Reverse Mortgage

If you're over age 55, a reverse mortgage lets you borrow up to 50% of your home's value. You don't make payments on a reverse mortgage. But interest grows on the mortgage debt until you sell the home or pass away.


Second Mortgage

A debt registered against a property that is secured by a second charge on the property.

Statement of Adjustments

The statement of adjustments is a document prepared by the seller's lawyer. It states the purchase price, deposit amount and financial adjustments needed for prepaid taxes, utilities or condo fees. When these calculations are final, you know exactly how much to pay the seller on the closing date.


A survey is a property plan that identifies property boundaries, lot size and building position. It also shows if there are any overhanging structures or shared driveways that could impact property value. A professional land surveyor prepares the survey. Your lender may ask you for a current survey of the property during the mortgage application process.


To transfer an existing mortgage from one financial institution to another.


Tax Payment

The portion of your mortgage payment that is used to pay your property taxes.


A mortgage term is the length of time you are committed to a mortgage rate, lender and conditions set out by that lender.  


The title is the ownership you buy when you purchase a property. Lenders require a clear "title" to the property before they release mortgage funds. Any issues or concerns about the property's title — fraud, survey errors, municipal work orders, zoning violations and encroachments — found through the lawyer's title search must be resolved before closing. Mortgages are "registered against title" or "registered on title" to protect the lender's financial interest in the property.

Title Insurance

Title insurance protects buyers and lenders from defects on title discovered after closing. Title defects could include title fraud, survey errors, municipal work orders, zoning violations and encroachments. Consult with your lawyer about title insurance. If you buy title insurance, it's added to your closing costs.

Total Debt Service (TDS) Ratio

This is a mathematical calculation used by lenders to determine a borrower’s capacity to repay a mortgage. It takes into account the mortgage payments, property taxes, approximate heating costs, and 50% of any maintenance fees, and any other monthly obligations (i.e. personal loans, car payments, lines of credit, credit card debts, other mortgages, etc.), and this sum is then divided by the gross income of the applicants. Ratios up to 44 % are acceptable.



Variable Rate Mortgage

A mortgage for which the interest rate fluctuates based on changes to the prime rate.

Vendor Take-Back (VTB) Mortgage

This allows the seller of the home to lend money to the buyer for the purchase of their property. The property has to be owned outright by the seller, meaning there can’t be a mortgage on the home at the time of selling.