Knowledge Center · Reference
The Mortgage Glossary
Mortgage paperwork is full of jargon — amortization, LTV, IRD, collateral charge. This is a plain-English A–Z of the words you will actually meet on a lender commitment, with the calculator or service that puts each one to work.
Showing 28 of 28 terms
A
3 termsAlternative Lending (B Lending)
Alternative lending sits between bank financing and private financing, serving borrowers with self-employment income, bruised credit, or debt ratios beyond prime guidelines.
Amortization
Amortization is the total length of time it would take to pay your mortgage down to zero at your current payment — commonly 25 years in Canada, and up to 30 years on some insured and uninsured mortgages.
Appraisal
An appraisal is an independent professional estimate of a property's market value, used by the lender to confirm the security behind your mortgage.
B
1 termC
3 termsClosing Costs
Closing costs are the one-time expenses beyond your down payment that you must pay to complete a purchase — typically 1.5% to 4% of the purchase price.
Collateral Charge
A collateral charge is a way of registering a mortgage that secures more than the current loan amount, allowing the lender to lend you more later without a new registration.
Credit Score
A credit score is a three-digit rating between 300 and 900 that summarizes how reliably you have repaid borrowed money, and it directly affects which lenders and rates you qualify for.
D
3 termsDebt Service Coverage Ratio (DSCR)
DSCR measures whether a property's income covers its mortgage payments, dividing net operating income by the annual debt payments. It is the central test in commercial lending.
Debt Service Ratios (GDS and TDS)
GDS and TDS are the two ratios lenders use to measure how much of your gross income goes to housing costs and to total debt payments.
Down Payment
The down payment is the portion of a home's purchase price you pay from your own resources at closing, with the mortgage covering the rest.
F
1 termH
2 termsHELOC (Home Equity Line of Credit)
A HELOC is a revolving credit line secured against your home that you can draw from, repay, and draw again, with interest charged only on the balance you actually use.
Home Equity
Home equity is the portion of your property you actually own: the current market value minus everything still owed against it.
L
2 termsLand Transfer Tax
Land transfer tax is a provincial (and sometimes municipal) tax charged on the value of property when ownership changes hands, payable in cash at closing.
Loan-to-Value (LTV)
Loan-to-value is the mortgage amount expressed as a percentage of the property's value, and it is the main measure lenders use to price risk.
M
4 termsMortgage Default Insurance
Mortgage default insurance protects the lender if a borrower stops paying, and is mandatory in Canada when the down payment is less than 20% of the purchase price.
Mortgage Renewal
A renewal is signing a new mortgage term with your existing lender when the current term matures, without changing the loan amount or the property.
Mortgage Stress Test
The stress test is a federal qualifying rule requiring you to prove you could still afford your mortgage at a rate higher than the one you were offered.
Mortgage Term
The term is the length of your current mortgage contract with a lender — most commonly five years — after which you renew, refinance, or pay the balance off.
P
6 termsPorting a Mortgage
Porting means carrying your existing mortgage — its rate, balance, and remaining term — to a new property when you move, instead of breaking it and paying a penalty.
Pre-Approval
A pre-approval is a lender's written confirmation of the mortgage amount and rate you likely qualify for, based on verified income, debts, and credit, before you make an offer on a property.
Prepayment Penalty
A prepayment penalty is the fee a lender charges when you break your mortgage before the term ends or repay more than your contract allows.
Prepayment Privileges
Prepayment privileges are the extra payments your contract allows each year without a penalty, usually expressed as a lump-sum percentage plus a permitted payment increase.
Principal
Principal is the amount of money you actually borrowed and still owe, separate from the interest charged for borrowing it.
Private Mortgage
A private mortgage is short-term financing from an individual investor or mortgage investment corporation rather than a bank, secured mainly by the property's equity.
R
2 termsRefinancing
Refinancing means replacing your existing mortgage with a new, usually larger one — often to access equity, consolidate debt, or change your rate and structure mid-term.
Reverse Mortgage
A reverse mortgage lets homeowners aged 55 and older convert part of their home equity into tax-free cash with no required monthly mortgage payments.