Mortgage Glossary of Terms

A
Accredited Mortgage Professional All licensed mortgage brokers in Canada must be accredited by the Association of Accredited Mortgage Professionals. This is Canada's only national association that represents the mortgage industry.
Acre An area of land measuring 43,560 square feet.
Addendum A change made to a contract. Rather than rewriting a contract, addendums are added to make it clear what parts are changing and to simplify the change process.
Adjustable Rate Mortgage An adjustable-rate home mortgage is one in which the mortgage interest rate rate and payment amount may be adjusted during the term of the mortgage.
Agent A person representing or legally acting on behalf of another person.
Agreement of Purchase and Sale A legal agreement in which a buyer offers to purchase a home from a seller at a set price on a certain date. The agreement may be conditional on certain events such as the sale of the buyer's existing home. It may also be conditional on the buyer being able to attain the required financing. Other conditions include completing a satisfactory home inspection.
Amenities Amenities are features above and beyond what is normal or customary for a given property. For example, a pool or a tennis court would be considered amenities in most neighbourhoods.
Amortization Period The Amortization Period is the total length of time required to pay off your mortgage. Most mortgages in Canada are amortized over 25 years to 40 years. Depending on the terms of your mortgage, there may be several ways that you can reduce your amortization period. These include:
  1. Increasing the amount you pay each month.
  2. Making payments more frequently (for example, bi-weekly rather than monthly).
  3. Making extra payments periodically, for example, if you receive a tax refund you might want to apply this to your mortgage in order to pay off your mortgage sooner.
The shorter your amortization period, the less interest you will pay in total.
Appraisal An appraisal is performed to try to assess the Fair Market Value of a home. Often a lender may require a recent appraisal to ensure that the mortgage amount does not exceed 95% of the appraised value of the home. The appraised value could be more or less than the purchase price.
Appraised Value The estimated Fair Market Value of a home or property.
Asking Price The price that a seller of a property is asking the purchasers to pay. Homes often sell for little less than the asking price but in a seller's market a home can even fetch more than the original asking price.
Assets The things of substantial value that you own. The combined value of all of your assets, minus all of your Liabilities establishes your net worth.
B
Blended Payments Blended payments include both a portion of the payment that covers interest expenses and a portion that covers the principal amount. Assuming the blended payment is greater than the interest charges, over time more of each payment will be applied to the principal amount since the interest payments are reduced slightly with each successive payment.
Blended Rate Mortgage If you have an existing mortgage and you seek to obtain additional funds to redeploy home equity, you may be able to take out a new mortgage for a larger amount and with different terms. The rate of interest in this case is often a blend or combination of your existing mortgage rate and the current prevailing mortgage rates.
Bridge Financing When selling an existing asset to pay for a new asset short-term bridge financing may be required when there is a lag between the purchase date of the new asset and the selling date of the existing asset.
Buyer's Market A real estate market in which there is a glut of homes for sale and where buyers have lots of selection and time to purchase the home they want. In a buyer's market, home prices tend to be stable or declining.
C
Canada Mortgage and Housing Corporation CMHC is a crown corporation with the Canadian federal government that insures mortgages to protect lenders from mortgage default. CMHC helps Canadians access affordable homes by insuring one out of every three home buyers.

To learn more, visit the Canada Mortgages and Housing Corporation website.
Carrying Costs The expenses associated with living in and carrying a home or property. Carrying costs typically include all interest payments, taxes, utility costs, maintenance costs, etc.
Closed Mortgage A mortgage whose terms are set for a specific period and which generally cannot be repaid or adjusted until the end of the term of the mortgage. Sometimes the conditions associated with a Closed Mortgage allow for certain adjustments, for example, a closed mortgage might allow one extra payment per year.
Closing Costs There are generally fees and expenses associated with the purchase of a property. These costs can include legal fees and disbursements, land transfer taxes, adjustments for prepaid property taxes or utility fees. Closing costs generally range from 2% - 4% of the value of the property.
Closing Date The date that the seller releases a property to the buyer and the buyer pays for the property.
Collateral Mortgage A loan in which an existing property is used as collateral to secure the loan. In this case, the loan is not a mortgage because the loan is used for other purposes, not for the purchase of the property used as collateral.
Compound Interest Interest that is charged on both the principal and the interest. Generally, home mortgage interest is compounded semi-annually.
Conditional Offer An Agreement of Purchase and Sale that contains certain conditions that must be met before the purchase offer becomes final. Typically, existing home owners make their purchase offers conditional on the sale of their current property since they require the proceeds from this property to free up the funds required to purchase the new property.
Condominium A form of property ownership whereby a building is divided into separate units that are individually owned while the common areas of the building or complex are jointly owned by all unit owners. For example, an apartment building could be converted to a condominium. In such a case, individuals may purchase apartment units but the unit owners collectively are responsible for maintaining the common areas and external structures of the building. Generally, regular condominium fees are collected to cover the cost of maintaining common areas and property.
Contract A legally binding agreement between two or more parties.
Conventional Mortgage A conventional mortgage is one where the mortgage amount is less than (or equal to) 80% of the appraised value or purchase price of the mortgaged home (whichever is greater). Conventional mortgages do not require mortgage insurance however some lending institutions may require mortgage insurance for high risk conventional mortgages. If the mortgage amount is greater than 80% of the home value, this is called a high-ratio mortgage.
Convertibility Mortgage Convertible mortgages allow you to start out with one term and later switch to a different term without penalty. For example, you could take out a variable rate convertible mortgage if rates are low then switch this to a five-year fixed rate mortgage if you think rates are going to go up.
Credit Rating When you apply for a mortgage, your lender will want to obtain a credit report on you to assess the risk associated with the loan. If you have a history of consistently repaying loans you should have a good credit rating. If you have failed to make payments on time, this could result in a negative credit rating. If your credit rating is not very good, you may have to pay a higher rate of interest on your mortgage. Your credit rating is more important if you have a small down payment than if your mortgage is small relative to the value of the mortgaged property.

If you wish, you can obtain a copy of your own credit report by purchasing this from a company such as Equifax or TransUnion.
D
Deed A document that is signed by the seller to signify that the ownership of the property was transferred to the buyer. The deed is registered against the title of the property as proof that the buyer is the owner of the property.
Debt-Service Ratio The percentage of the borrower's gross income that will be used to cover mortgage payments, taxes, heating and electricity costs and condominium fees.
Default Failure, on the part of a borrower, to make the payments agreed to by the terms of a mortgage.
Deposit Typically a buyer of a property is required to put down a deposit on a home as part of their offer to purchase. This deposit is held in trust by the vendor's agent, broker or lawyer until the closing date of the purchase agreement.

If the buyer withdraws the offer to purchase, without just cause, the seller is generally entitled to keep the deposit.
Down Payment It is generally not possible to obtain a mortgage for the full value of a home or other property. Lenders expect the purchaser to contribute some of their own money towards the purchase. This initial financial contribution of the buyer is known as the down payment.

Most lenders require a minimum down payment of 5% of the purchase price. If your down payment is less than 20% of the purchase price you are required, by Canadian law, to purchase mortgage default insurance.
E
Easement A right, such as a right of way, that someone has been granted over another person's property. For example, if a property is completely "Land Locked" in that it can only be accessed by trespassing on someone else's property, an easement is often granted to permit the land owner to walk or drive across an adjacent property to reach the owned property.
Encroachment A fence, building or other structure that illegally extends onto another person's property.
Encumbrance A claim against a property or a restriction related to the property that may hinder the value of the property. For example, an easement that gives someone the right to use your property serves as an encumbrance to your property. Similarly, if there is a lien on your property by a contractor, this lien represents an encumbrance.
Equifax Equifax is one of Canada's major credit rating companies.
Equity The value of a property over and above what is owed on the property. For example, if a property has a fair market value of $400,000 and there is an outstanding mortgage of $200,000 on the property plus an additional home equity loan of $10,000 outstanding, the owner is said to have $190,000 worth of equity in the property.
Escrow Money held by a neutral third-party for safe-keeping until or in case certain conditions are met. For example, in a real estate transaction, the buyer could place the purchase amount in Escrow as evidence that they have the money to purchase the property without risking this money by giving it to the seller before taking possession of the purchased property.
F
Fair Market Value The price at which buyers would be willing to purchase a property and sellers would be willing to sell the property.
Firm Offer An offer to purchase a property without any conditions. A firm offer is generally taken more seriously by the seller since there are no conditions that could cause the offer to be withdrawn by the purchaser.
First Mortgage The mortgage that is registered first against a property. First mortgages are generally more secure because these must be paid off first in the event of the sale of the property.
Fixed Rate Mortgage Fixed rate mortgages, also known as closed mortgages allow you to lock in a guaranteed interest rate for the entire mortgage term. Terms generally range from a minimum term of 6 months to a maximum term of 10 years. Most people choose terms from three to five years to provide medium term mortgage interest rate stability without paying the extra interest premium associated with very long terms.

Although the payment terms of closed mortgages is fixed, most mortgage lenders allow you to make periodic extra payments on your mortgage. Usually, there are limitations on how many extra payments you can make and the percentage of the original mortgage you are allowed to pay down without incurring charges or penalties. If you have extra cash, for example, from investment gains or tax refunds, you should consider applying this to your mortgage to reduce the interest you will pay.
Forbearance When foreclosure on a property is deferred because the borrower has arranged to pay all amounts due.
Foreclosure A legal procedure where the lender of a property (the mortgage holder) can repossess or assume ownership of a property because the borrower has failed to repay the mortgage under the agreed upon mortgage terms.
Full Income Verification The requirement for a borrower to provide evidence of their income before the mortgage lender will lend them money.
G
Gross Debt Service Ratio The percentage of your before-tax income that is used to pay your mortgage, taxes, utilities and other housing costs. A rule of thumb is that a family's GDS should not exceed 32%.
Gross Household Income The total before-tax income, including wages and investment income, of the individuals who are contributing to the servicing of a mortgage.
Guarantor A person who promises that a loan will be repaid. For example, someone with a very poor credit rating may have difficulty obtaining a loan unless a reliable guarantor co-signs for the loan.
H
Half-Bath A bathroom that does not contain a bathtub or a shower.
Hectare An area of land measuring 10,000 square meters.
High-Ratio Mortgage A high-ratio mortgage is one where the mortgage amount is greater than 80% of the appraised value or purchase price of the mortgaged home (whichever is greater). By law, high-ratio mortgages require the buyer to purchase mortgage default insurance.
Holdback When having costly work performed on your home, such as renovations or maintenance, contractors generally require a portion of the work to be paid up-front. Nevertheless, it is customary to "Hold Back" a portion of the cost until all work is completed to the homeowner's satisfaction.
Home Equity The current fair market value of a home or property minus the amount that is owed on the property.
Home Equity Loan A home equity loan is a loan in which the equity in a home is used as collateral. Generally, home equity loans are associated with homes that already have a mortgage. Therefore, home equity loans represent second mortgages or even third mortgages.
Home Inspection An objective visual examination of a home's structure, electrical systems, plumbing, ventilation, heating, air conditioning, foundation, roofing, siding, insulation and mechanical systems by a qualified home inspector. The goal of the home inspection is to assess the structural soundness of the home and point out areas where near-term maintenance expenses could be required.

The home inspector does not assess the value or cosmetic appearance of the home.
Home Mortgage A home mortgage is simply a mortgage that is secured by a property. When you take out a mortgage to purchase a home, the home itself serves as collateral for the lender in case you are unable to fulfill the payment obligations set out in the terms of the mortgage.
Home Warranty A guarantee related to the workmanship and construction of a home. Most new homes come with a comprehensive 2-year warranty and a full 7-year warranty covering structural damage. Resale homes generally do not come with any warranty unless they still have an active new home warranty.
I
Income Property Property, such as rental property, that is purchased for the purpose of earning income.
Inspection Report Normally, when a home inspection is performed on a property, the home inspector documents the results in an inspection report.
Installment A regular mortgage payment or other payment used to settle a portion of a debt.
Interest Interest is the amount of money that must be repaid over and above the amount that was borrowed. All lenders expect to be paid interest to compensate for the fact that they are putting their money at risk by lending it out. Also, due to inflation, money repaid at a later date is generally worth less than the money is worth today. Interest helps to compensate for this gradual decline in the value of money. For most mortgages in Canada, interest is compounded semi-annually.
Interest Rate Differential Amount Most closed mortgages cannot be paid off without penalty. Typically, the penalty is calculated based on the difference between the locked-in mortgage interest rate and the current mortgage rates. So if you have three years remaining on your mortgage which is at a rate of interest of 6% and current 3-year mortgages are 5%, your Interest Rate Differential amount would be approximately 1% of your mortgage amount for 3 years.
Interim Financing Also known as Bridge Financing, this represents a short-term loan required when the closing date of a sale of an existing home comes after the closing date of a planned purchase. In such a case, the buyer/seller requires funds to bridge the gap between these transactions. For most existing home owners who are moving to another location, the only way to avoid the need for bridge financing is to try to establish the same closing date for the sale of your existing home and the purchase of the new home.
J
Joint Liability When two or more parties are responsible for the repayment of a debt obligation.
Joint Tenancy When two parties (often spouses) jointly own a property and agree that if either party dies, the property will be assigned to the other individual.
K
Kicker Special benefits made available to a lender beyond the normal interest payments.
L
Land Transfer Tax Whenever a property changes hands, the buyer must pay a land transfer tax to the Provincial government. For Ontario, the Land Transfer Tax is computed using the following formula:
  1. 0.5% of the first $55,000 of the purchase price ($275 max), plus
  2. 1.0% on the amount exceeding $55,000 of the purchase price up to and including $250,000 ($1,950 max), plus
  3. 1.5% on the amount exceeding $250,000 of the purchase price up to and including $400,000 ($2,250 max), plus
  4. 2.0% on the amount over $400,000
Currently the only regions in Canada that do not charge a land transfer tax are the provinces of Alberta and Saskatchewan and rural areas in Nova Scotia.
Lender Mortgages are available from many different types of lenders including insurance companies, banks, trust companies and credit unions. Different companies offer different rates, terms and conditions. A mortgage broker helps you obtain the best rates and terms to suite your particular situation.
Liabilities The sum of all the amount that you owe is your liabilities. Liabilities include your outstanding loan amounts due, credit card debt, mortgage debt and taxes due. Your Net Worth is calculated by adding up all of your assets and subtracting all of your liabilities.
Lien A legal claim on a portion of the value of a property by a person who does not own the property.
Lis Pendens A document that informs the parties involved in a real estate transaction of something that could affect the title or ownership of the property.
Locked in Rate A rate of interest that is guaranteed not to change for an agreed upon term.
M
Maturity Date The date at which a mortgage becomes due. This is the final date within the term of the mortgage.
Mill Rate A unit of taxation used by municipal governments to determine property taxes. Generally the mill rate is multiplied by the assessed value of each home to determine the property taxes to be charged.
Mortgage A mortgage is the transfer of property entitlement to a lender as a means for the lender to secure a loan issued to purchase the property. In other words, when you take out a loan to purchase some property, the property itself is used to secure this loan. If you are unable to repay the loan, the lender has the right to foreclose on the mortgage (repossess the mortgaged property).
Mortgage Broker A mortgage broker helps you secure a good interest rate on your mortgage by working with many different financial institutions to obtain the best rate and mortgage terms for your situation. Mortgage brokers don't lend money directly to you, instead they arrange the mortgage by finding a lender for you. Since mortgage brokers work with many different lenders, they can save you time and money by presenting mortgage products and options that are available across a variety of institutions.

In most cases, you can obtain a better rate of interest from a given lender by working through a mortgage broker rather than dealing with the exact same lender directly.
Mortgage Critical Illness Insurance It is possible for a borrower to obtain insurance to protect against a critical illness that would prevent the borrower from earning money to make mortgage payments. If this type of insurance is purchased, the insurer would continue to make payments on the mortgage for the duration of the borrower's critical illness.
Mortgage Default Insurance Mortgage default insurance is required in Canada for all High-Ratio Mortgages. That is, mortgages where the Down Payment is less than 20% of the value of the home. Mortgage insurance must be purchased by the homeowner but it is used to protect the lender against Mortgage Default.

Mortgage insurance is typically purchased through the Canada Mortgage and Housing Corporation (CMHC), which is a crown corporation (part of the federal government). It can also be purchased through private insurers.

The cost of mortgage default insurance varies based on the percentage of the down payment that you have applied. Insurance premiums are typically between between 0.5% and 3% of the borrowed amount, per annum. These premiums are higher for self-employed borrowers.
Mortgage Disability Insurance A form of insurance that offers to make your mortgage payments in the event that you become disabled and unable to work.
Mortgagee The mortgage lender is referred to as the Mortgagee.
Mortgage Interest Rate The rate of interest associated with a mortgage contract. For fixed rate mortgages, the interest rate is guaranteed for the entire term of the mortgage. For variable rate mortgages, the rate of interest fluctuates with the prime lending rate.
Mortgage Life Insurance Mortgagors typically do not want to burden their family with mortgage debt in the event of their death or terminal illness. Standard life insurance can be purchased to provide funds to pay off a mortgage but such insurance would generally be for a fixed amount. Since the outstanding principal of a mortgage generally declines over time, Mortgage Life Insurance has the benefit that the insurance pay-out declines according to the amount remaining on the mortgage.
Mortgage Payment The amount that you pay on a regular basis to toward paying down your mortgage. In addition to principal and interest, your mortgage payment may also include your property tax payment.
Mortgage Rates The mortgage rates refer to the mortgage interest rate. That is, the rate of interest that you are paying on your mortgage.
Mortgage Refinancing Mortgage refinancing is the process of renegotiating or replacing your existing mortgage. There are a number of reasons that you may wish to refinance your mortgage. Some reasons for refinancing include:
  1. You may be part way into the term of your mortgage but feel that mortgage interest rates have bottomed. In this case, you might want to establish a new 5-year mortgage to take advantage of the current low rates.
  2. You may be carrying non-mortgage debt at a high rates of interest. For example, if you have credit card debt or car loans but you have equity in your home, you may seek to increase your mortgage to free up capital to pay down your high interest debt.
  3. If you have a mortgage but you also have investments, you might consider using your investments to pay down your mortgage. You can then borrow to purchase new investments. The net effect of this is that you have swapped non-deductible mortgage debt for tax-deductible investment debt.
Mortgagor The borrower is known as the Mortgagor.
Multiple Listing Service A network of real-estate agents and brokers who agree to pay commission on the sale of a home, irrespective of the firm representing the home buyer.
N
Negative Amortization When the payments associated with a mortgage are less than the interest being accumulated on the mortgage a negative amortization occurs. That is, the principal amount grows over time rather than shrinking as is the case with most mortgages.
Net Income A person's income after paying all income taxes, unemployment insurance premiums and Canada Pension Plan payments.
O
Offer to Purchase A formal legal document that indicates a buyers intention to purchase a property on a given date for a specified amount. An offer to purchase may be a conditional offer or an unconditional offer.
Open House A low-pressure sales technique used by real estate agents to allow interested parties to tour a home for sale without having to make an appointment.
Open Mortgage Open mortgages allow you to pay off all or a portion of the mortgage at any time. You generally have to pay a higher interest rate for open mortgages since they offer this early payment privilege. Also, open mortgages tend to be for shorter terms than fixed mortgages (also called closed mortgages). Usually open mortgages have terms of six months or a year.

Open mortgages are particularly beneficial in situations where you are planning to pay off much of the mortgage in the near term. For example, if your house is for sale or you are expecting a large sum of money from the sale of a cottage or other asset, you should consider an open mortgage so that you can use this month to pay down your mortgage without penalty.
P
Payment Adjustment Period A period of time where payments on an adjustable rate mortgage may fluctuate.
Payment Frequency Most mortgages allow you to indicate how frequently you would like to make your payments. Payment options generally range from weekly to monthly. It is often a good idea to align your payment frequency with the frequency that you or your spouse is paid. Here are the most common payment frequencies:
Monthly Payments are made once per month
Semi-Monthly Two payments per month
Bi-Weekly Payments are made every two weeks
Weekly A payment each week
If your budgeting allows you to pay more frequently, you will incur less interest over the life of your mortgage by doing so.
P.I.T. If your mortgage payment covers the taxes on your property, each mortgage payment goes toward paying the Principal, Interest and Taxes (PIT).
Portable Mortgage If the terms of your mortgage allow you to move the mortgage to a new property it is said to be portable. For example, if you have an existing mortgage at a favourable rate of interest, you may want to move this mortgage to a different property if you sell your home and buy a new one. Only portable mortgages offer this option.
Power of Sale If a borrower fails to make the payment obligations on a mortgage, the mortgagee has the right to force the sale of the property without judicial proceedings.
Pre-Approved Mortgages When considering the purchase of a new home, you may not know how much lenders will be willing to lend to you. Therefore, you won't know the price range of the homes to consider. To solve this problem, it is a good idea to seek mortgage pre-approval. A mortgage broker can work with you in advance of obtaining your actual mortgage to pre-approve you for a certain size of mortgage. This way, when you find a house valued less than or equal to the pre-approval amount you are assured that a mortgage will be available to you for the required amount.

One advantage of pre-approving your mortgage is that this generally guarantees your interest rate for a period of time and for a certain mortgage amount.
Prepayment Charge With a closed mortgage, there is typically a fee associated with paying down a portion of the mortgage beyond what is allowed by the terms of the mortgage.
Prepayment Option Most mortgages allow the borrower to prepay a certain portion of the principal amount at various times during the term of the mortgage. For example, some lenders allow one extra payment per year, not exceeding 10% of the original mortgage amount. This is an example of a prepayment option.
Prime Lending Rate The rate of interest that banks charge to their most creditworthy customers.
Principal The amount of money originally borrowed for your mortgage or the amount of money that still remains to be repaid.
Principal Residence The home where you spend the majority of your time.
Probate Sale The sale of assets after the owner of the assets has died. The proceeds from the assets are distributed first to creditors then to heirs.
Q
There are currently no Q words in our mortgage glossary
R
Realtor A real estate agent licensed to represent you in the sale of your home or the purchase of a new home.
Refinancing Renegotiating your existing mortgage. This may involve paying off your current mortgage with the proceeds of a new mortgage. If your current mortgage is closed there are generally fees associated with paying it off early. Refinancing may also involve increasing your current mortgage. For example, if you are paying interest on credit card debt or other loans, it may be possible to increase the size of your mortgage and use the proceeds to pay off higher interest debt.
Renewal It the end of the term of your mortgage it must either be paid back or renewed. The renewal process may involve "rolling-over" your existing mortgage under new terms.
Repossess If a borrower fails to live up to the terms of a mortgage, the lender has the right to take over ownership of the property securing the mortgage. This is called repossessing the property or foreclosing.
Reverse Mortgage A type of mortgage that allows elderly people to convert equity built up in their home to provide income. The loan must be repaid when the owner dies or sells their home.
S
Second Mortgage An additional mortgage granted on a property that already has a mortgage on it. When the property is sold, the proceeds must be used to pay off the first mortgage first. Any remaining funds would be put towards repaying the Second Mortgage. This makes second mortgages riskier from the standpoint of the lender and therefore they tend to command a higher mortgage interest rate.
Security A security is something that is used as collateral on debt. In the case of a mortgage, the property being mortgaged is used as the security of the mortgage.
Seller's Market A real estate market when homes are in great demand and sellers can easily sell their home, in some cases for even more than their asking price. In a seller's market, home prices tend to increase.
Simple Interest Interest that is charged only on the principal amount, not on the interest.
Spread The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
Step-Rate Mortgage A fixed rate mortgage where the payments are lower during the initial term of the mortgage in increase part way through the term.
Sub-prime Mortgage A mortgage given to borrowers with a tainted credit history. Typically, sub prime mortgages demand a higher rate of interest to make up for the fact that the borrower has demonstrated themselves to be higher risk.
Survey A legal document that shows the exact size and location of a property as well as the location and dimensions of all buildings located on the property. A current survey is generally required in order to obtain a mortgage on a property.
T
Tax Lien A claim against a property as a result of unpaid property taxes.
Teaser Rate A special below-market rate that is sometimes offered to borrowers to entice them to take out a mortgage with a certain lender. The teaser rate lasts only for a short while then the rate switches to a standard or even inflated rate.
Term When you take out a closed mortgage you can lock in the interest rate that you pay for a certain length of time, known as the term. The term of most mortgages is from one to five years, however, 6-month terms are available as are longer terms of up to 10 years. Generally, you will want to choose a longer term when interest rates are low and shorter terms when interest rates are high. The interest rate for shorter term mortgages tend to be lower than longer term mortgages because there is a shorter guaranteed rate protection period. If you think interest rates are going to be stable or trend lower, you can save on interest by choosing shorter term mortgages with better rates. If you want the security of knowing that your rate won’t increase for a long time, you should choose a longer term to protect yourself against rising rates.
Timeshare A property where multiple owners share use of the facility at different times of the year. This is typically associated with vacation property whereby one owner might be allowed to use the property for two designated weeks per year.
Title A document the shows legal ownership of a property.
Title Search A background search of a property title to determine whether anyone has any claims to a title. For example, the the owner owes money for work performed on a property, the debtor can request that lean be placed on the property. In such a case, the buyer of this property could be responsible for any outstanding claims against the property.
TransUnion One of the major credit rating companies in Canada,
Trustee Someone responsible for dividing up a person's assets after their death.
U
Umbrella Mortgage An arrangement where several existing mortgages on a property are paid down using a new mortgage on the same property.
Unconditional Offer An offer to purchase a property that does not have any special conditions attached.
Unsecured Debt Debt that is not secured against an asset such as a property or vehicle.
V
Valuation The process of assessing the fair market value of a property through an appraisal.
Variable Rate Mortgage Variable rate mortgages are not assigned a locked in interest rate, but rather, the rate of interest changes according to market conditions. The rate of variable rate mortgages generally changes whenever there is a change in the prime lending rate. The rate used in variable rate mortgages generally tracks the 5-year mortgage rates which are normally higher than the short-term rates. Usually, your payments will stay the same throughout the term of your mortgage but as the rate changes more or less of the mortgage payment amount will be attributed to interest charges. So if interest rates go down, you will pay off your mortgage sooner, if interest rates rise it will take longer to pay off your mortgage.

Variable rate mortgages can be either open (you can pay them off at any time) or closed (you cannot pay them off without a penalty).
Vendor The seller of a property.
Vendor Take Back Mortgage A type of mortgage where the seller agrees to offer a mortgage on the property they are attempting to sell.
W
Waiver A clause that relinquishes a right or a claim in a contract.
Wraparound Mortgage A means of refinancing a property by combining two or more mortgages into a single first mortgage.
X
There are currently no X words in our mortgage glossary
Y
There are currently no Y words in our mortgage glossary
Z
Zero Down Mortgage A mortgage that does not require a down payment and therefore the mortgage is for 100% of the principal amount.

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