Bank of Canada Overnight Rate
The target interest rate at which major banks lend money to each other overnight.
Bridge Financing
A short-term loan that covers the gap when you buy a new home before selling your current one.
CMHC Mortgage Insurance
Default insurance required when your down payment is less than 20% of the purchase price.
Closing Costs
The expenses beyond the purchase price that you pay when buying a property.
Conventional Mortgage
A mortgage where the down payment is 20% or more of the purchase price.
Financial Services Regulatory Authority (FSRA)
The Ontario regulatory body that licenses and oversees mortgage brokerages, agents, and administrators.
First Home Savings Account (FHSA)
A tax-advantaged savings account specifically for first-time home buyers in Canada.
Fixed Rate Mortgage
A mortgage where the interest rate stays the same for the entire term.
Home Buyers' Plan (HBP)
A program that lets you withdraw from your RRSP to buy or build a qualifying home.
Home Equity
The difference between your property's current market value and the outstanding mortgage balance.
Home Equity Line of Credit (HELOC)
A revolving credit line secured against the equity in your home.
Insured Mortgage (High-Ratio)
A mortgage where the down payment is less than 20%, requiring mortgage default insurance.
Interest
The cost of borrowing money, calculated as a percentage of the outstanding principal.
Interest Rate
The percentage charged by a lender for borrowing money, expressed as an annual rate.
Land Transfer Tax (LTT)
A provincial tax paid when you purchase real estate in Ontario.
Loan-to-Value (LTV) Ratio
The ratio of your mortgage amount to the appraised value of the property.
Mortgage Broker
A licensed professional who arranges mortgage financing between borrowers and lenders.
Mortgage Investment Corporation (MIC)
A company that pools investor funds to provide mortgage loans, primarily to borrowers who do not qualify for bank financing.
Mortgage Portability
The ability to transfer your existing mortgage to a new property without breaking the term.
Mortgage Pre-Approval
A conditional commitment from a lender for a specific mortgage amount and rate, valid for a set period.
Mortgage Refinancing
Breaking your existing mortgage before the term ends to access equity, change your rate, or consolidate debt.
Mortgage Renewal
The process of renegotiating your mortgage terms at the end of your current term.
Mortgage Stress Test
A federal requirement that mortgage applicants must qualify at a higher rate than their actual mortgage rate.
Mortgage Term
The length of your mortgage contract with a specific lender, typically 1 to 10 years.
Power of Sale
A legal process in Ontario where a lender sells a property to recover an unpaid mortgage without going through court foreclosure.
Prepayment Penalty
A charge from your lender if you pay off your mortgage early, make extra payments beyond your privileges, or refinance before the term ends.
Prime Rate
The benchmark interest rate that Canadian banks use to set variable mortgage rates and lines of credit.
Principal
The amount of money you originally borrowed, excluding interest.
Private Mortgage
A mortgage provided by an individual investor or private lending company rather than a bank or credit union.
Property Appraisal
An independent assessment of a property's market value, typically required by lenders before approving a mortgage.