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Accelerated Payment:  a mortgage loan can be repaid faster to lessent the overall interest charges if the payment frequency is increased.  Example.  Accelerated Bi-Weekly payments.

Adjustable Rate Mortgage:  Monthly payment will change with the variable interest rate as determined by the movement of Bank of Canada benchmark interest rate.  Monthly payments is recalculated to ensure the mortgage amortization remains true to the period set at the origination of the mortgage loan.
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Amortization:  The period (stated in months or years) in which the mortgage loan will be repaid in full.  The amortization period and the associated interest rate determines the amount of the mortgage payment given the amount of the mortgage loan.

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Bank of Canada Rate:  Policy interest rate set by the Bank of Canada (also known as the overnight rate) at which major financial institutions borrow and lend funds each day.    This in turn dictates how financial institutions set prime lending rate on variable interest rate products.

Bridge Financing:  A temporary loan authorized to facilitate the purchase of a new property while the existing property is pending to close.  Such temporary loan requires repayment in full upon the completion of the sale of the existing property.

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Canada Guaranty: is a private mortgage insurance company that offers mortgage insurance solutions to lenders and helping qualified homebuyers who purchases this insurance to secure financing on purchasing a home with lower down payments.  Industy competitors are Sagen and CMHC.

Closing Costs:  Expenses associated with the purchase of a new property.  This includes legal fees, property transfer tax, GST (new builds) and any adjustments owed to the Seller such as prepaid property taxes.

CMHC: Canada Mortgage Housing Corporation is a federal Crown corporation responsible for improving housing affordability and access across Canada.  CMHC provides mortgage insurance to support qualified buyers who purchases such insurance as guaranty to the Lender.  Industry competitors are Canada Guaranty and Sagen.

Conventional Mortgage:  Is a mortgage loan where the financing is less than or equal to 80% of the property value.  In other words the Homeowner / Purchaser has at least 20% equity or down payment.

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Default: is used in reference to a borrower that has not fulfilled their contractual obligation to the mortgage lender.

Down Payment:  is the amount representing the Purchaser /  Buyer equity invested into the purchase of the property.  Down payment that is less than 20% of the property value, will require Mortgage Insurance offered by CMHC, Sagen or Canada Guaranty.

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Equity:  the portion of a property value that the owner owns that is free from mortgage debt or other any lien on the property.

Equity-Take-Out:  seeking mortgage financing on a property that a homeowner already possess. Also known as mortgage refinance. 
 
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Fixed Mortgage Rate:  is the agreed interest rate that will continue during the period of a mortgage term.  A fixed mortgage rate expires at the end of the term and is re-negotiated at time of renewal for the next mortgage term.

Freehold Title: is a category of land ownership where the owner has full rights to both the land and any structure on it.

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Gross-Debt-Service Ratio:  a finance analysis used to measure the capacity of an Applicant's ability to repay monthly expenses associated with property ownership.  GDSR is calculated by adding the monthly mortgage payments, monthly equivalent of property taxes and monthly heating cost then divided the applicant's gross monthly income.

Guarantor:  an applicant who agrees to be responsible for the mortgage repayment.  It is important for a guarantor to understand that a Lender may bypass the borrower to seek repayment of a mortgage in default.

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High Ratio Mortgage:  a mortgage loan that exceeds 80% of the property value.  Lender's increased risk is offset by a guaranty by a High Ratio Insurer who agrees to protect the lender of potential loss if the property is devalued at the time of forced sale.  See Canada Guaranty, CMHC and Sagen.

Home Equity Line of Credit (HELOC):  a mortgage credit facility approved for a set spending (credit) limit.  Monthly payment amount is typically the interest accrued.   Payment in excess of the interest due will reduce the balance of the HELOC.   All repaid principal can be re-borrowed without re-applying (as long as the balance does not exceed the credit limit.

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Insured Mortgage:  is a mortgage loan value that exceeds the security guidelines of a conventional mortgage or 80% of the property value.  See High-Ratio Mortgage.

Inter-Alia-Mortgage:  is a mortgage loan that is secured by multiple properties owned by applicant(s).  Lender assess the total lending value of the combined properties to determine the security value for mortgage lending.

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Land Transfer Tax:  BC Property Transfer Tax is paid by the new purchaser calculated on fair market value of the property.  BC Government website will provide details of certain exemptions such as First-Time-Home Buyers.

Leasehold Title:  is the legal ownership of a property limited to the structure or building on the land.  The land is owned by the Lessor who maybe the Crown, Native or other private entity.

Loan-To-Value Ratio (LVR):  this ratio represents the safety margin of a lending guideline.  The LVR is calculated by taking the mortgage loan value and  divided it by the property assessed value.

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Mortgage Insurance:  is an insurance purchased by a qualified applicant to guaranty the mortgage loan against loss incurred by the Lending Institution when property sale proceed is insufficient to repay the mortgage loan balance.

Mortgage Term:  is an agreement between the borrower and the Lender that outlines the interest rate, payment and other conditions within the agreed period that the agreement is in effect.

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Notice of Assessment:  is a Canada Revenue Agency (CRA) statement that confirms the amount of income reported and income taxes that may or may not be owing for a taxation year.  

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Open Mortgage:  a condition in a mortgage term that gives the Borrower the right to repay the balance of the mortgage without pre-payment penalty charges.

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Portability: a feature a Lending Institution may allow to enable the borrower to keep the mortgage terms and balance unchanged while changing the property for security.  This is often in the case where a homeowner has sold their home and intends to move to a new residence.  It is important to note that portability can be limited by the Lender's geographical area for lending. 

Pre-Approval:  is the amount of a mortgage that a borrower has qualified to purchase with a Lender.  It is important to note that pre-approval is subject to conditions that needs to be satisfied before it is a firm approval.   Most common conditions are satisfactory appraisal and verification of qualifying conditions (ie. proof of down payment, employment and/or NOA).

Pre-Payment Penalty:  is fee paid to the Lender.  How this fee is calculated is expressed in the Mortgage Term for so a Borrower is informed before electing to repaying their mortgage in full or in part.

Prime Rate:  is set by Lending Institution in accordance to the Bank of Canada Overnight Interest Rate.  It is important to note that each Lending Institution can set their prime rate differently.  

Principal:  is the amount borrowed or outstanding during the life of a mortgage loan.

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Refinancing: the act of borrowing additional funds from an existing mortgage loan secured by the same real estate security.

Revolving: in reference to the outstanding balance of a Home Equity Line of Credit where the balance is paid down occasionally before the funds or credit limit is used again.

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Statement of Business Activities:  Also known as Canada Revenue Agency form T2125.  This form is used by Self-Employed individuals to report their business or professional income and expenses to CRA.

Statement of Rental Activities: Also known as Canada Revenue Agency form T776.  This form is used by Rental Property Owners to report their rental income and expenses to CRA.

Strata Corporation: is formed for the purpose of managing the Strata Property.  Their power to manage and enforce bylaw and financial responsibilities are set by the provincial Strata Act

Strata Lot:  is the individual unit within a Strata Property such as Condominium or Townhouse.  Each lot can be individually owned with shared ownership of Common Property.

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T1 General:  is the primary income tax form used by individuals to report their personal income, deductions and credit to CRA.  It summarizes all sources of income including employment, self-employment, investments and benefits.  This serves to determine tax liability or refunds.

Title: is a record of legal ownership of a property in a provincial land registry system.  It is further categorized as Freehold, Leasehold and Condominium Title

Total Debt Service Ratio (TDSR):  a finance analysis used to measure the capacity of an Applicant's ability to repay all monthly expenses associated with property ownership and other credit obligations shelter cost.   By taking the total of  Gross Debts (see GDSR) plus other debt payments such as personal loans,  credit cards and other contractual obligations then divide by gross monthly income.

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Variable-Rate Mortgage:  a mortgage loan that charges variable interest rate set by Prime rate that follow the movement of Bank of Canada benchmark interest rate.  Although the interest charges each month may increase or decrease, the monthly payment will remain unchanged.  In a period of prolong interest rate increases, the mortgage amortization will become lengthened.