57 plain-language definitions covering OSFI B-20, CMHC insurance, Bank of Canada policy transmission, IRD penalties, trigger rates, and every other concept you'll encounter in a Canadian mortgage conversation.
The interest rate on 5-year Canadian government bonds — the benchmark that drives 5-year fixed mortgage pricing.
A payment frequency where you pay half your monthly payment every two weeks — producing 26 half-payments per year, equivalent to 13 monthly payments instead of 12.
A variable-rate mortgage subtype where your monthly payment adjusts (not just the principal/interest split) each time Prime Rate changes.
A mortgage lender operating between traditional banks and private lenders — offering slightly relaxed underwriting and slightly higher rates than banks.
The total length of time required to pay off your mortgage in full — typically 25 years in Canada, up to 30 years for first-time buyers and all buyers of new construction on insured mortgages.
A mortgage that can be transferred from seller to buyer at sale, preserving the existing rate and terms — increasingly valuable when market rates are higher.
The overnight target rate set by the Bank of Canada — the single most important interest rate in the Canadian economy.
A renewal option that combines your existing rate with current market rates — extending the term without triggering prepayment penalties.
A short-term loan (30-120 days) that covers the gap when you buy a new home before your existing home sells.
The fees and expenses paid at closing on top of the down payment — typically 1.5% to 4% of the purchase price depending on province and buyer type.
Canada's federal housing agency and one of three mortgage insurance providers, backing insured mortgages and publishing housing market data.
A mortgage registration type that allows the lender to secure multiple loans against your property — more flexible for refinancing but harder to switch lenders.
A mortgage with 20% or more down payment — uninsured and with a loan-to-value ratio of 80% or below.
The actual rate a lender offers a borrower after discounting from the posted rate — what you actually pay on the mortgage.
The upfront portion of a home purchase paid from your own funds — minimum 5% on the first $500K, 10% on the portion above (up to $1.5M insured cap).
A Canadian tax-advantaged account for first-time home buyers — up to $8,000 in annual contributions ($40,000 lifetime) with tax-deductible deposits and tax-free qualifying withdrawals.
The primary loan secured against a property — first in priority for repayment in the event of default, and the mortgage most borrowers refer to simply as 'the mortgage'.
A new federal rebate (Bill C-4, Royal Assent March 12, 2026) that returns 100% of the 5% federal GST on newly-built homes up to $1M for eligible first-time buyers — saving up to $50,000, with linear phase-out to $0 by $1.5M.
A mortgage where the interest rate is locked for the full term, keeping your monthly payment constant regardless of Bank of Canada decisions.
An OSFI capital classification for residential mortgages where repayment does NOT materially depend on the property's cash flow. GRRE carries lower lender capital requirements than IPRRE, but per OSFI's Nov 2025 clarification, the same borrower income cannot be re-used to classify multiple mortgages as GRRE.
The percentage of your gross income consumed by housing costs — mortgage payment, property tax, heat, and 50% of condo fees. Limit is typically 39%.
A revolving credit line secured against your home's equity, priced as Prime plus a spread — typically 0.50% to 1.00% above Prime.
A mortgage with less than 20% down payment — loan-to-value ratio above 80% — that must carry default insurance.
A federal program allowing first-time buyers to withdraw up to $60,000 from their RRSP tax-free toward a home purchase, repayable over 15 years.
A single mortgage split between fixed and variable portions — e.g., 50% fixed and 50% variable — blending rate-cut upside with fixed-rate protection.
An OSFI classification for residential mortgages where repayment materially depends on the property's cash flow (rental income). IPRRE loans carry higher lender capital requirements than GRRE, which typically translates to higher rates or stricter terms for borrowers.
A mortgage where CMHC, Sagen, or Canada Guaranty carries the default risk — required when the down payment is less than 20% of the purchase price.
The larger of two penalty calculations applied when breaking a fixed-rate mortgage early at the Big 5 banks — often the difference between your posted rate and the lender's current posted rate.
A provincial (and sometimes municipal) tax paid by the buyer at closing on any property transfer — absent in Alberta and Saskatchewan, highest in Ontario/BC/Toronto/Montreal.
The ratio of your mortgage balance to the property's appraised value — the key metric for insurance, pricing, and HELOC limits.
The stress test rate — the greater of 5.25% or your contract rate plus 2 percentage points — used by lenders to qualify you for a mortgage.
CMHC's multi-unit mortgage loan insurance program that offers premium discounts (up to 30%), enhanced LTV (up to 95% LTC), 50-year amortizations, and limited-recourse structures based on social-outcome points covering affordability, accessibility, and energy efficiency.
A non-bank lender that specializes only in mortgages — broker-channel distribution, competitive rates, and typically better IRD penalty calculations than Big 5 banks.
A lender-ordered valuation of the property confirming the purchase price reflects market value — typically $350–$500 and sometimes rebated by the lender.
A licensed professional who shops multiple lenders on your behalf — typically compensated by the lender, not the borrower.
Breaking and replacing your existing mortgage with a new one — typically to access equity, consolidate debt, or change loan terms outside of renewal.
The process of setting new mortgage terms when your current term ends — you can stay with your lender or switch without re-qualifying (uninsured, unchanged amount).
The length of time you're committed to current mortgage conditions — typically 1 to 10 years, with 5 years being the Canadian standard.
When your mortgage payment fails to cover the full interest owed, causing the outstanding balance to grow instead of shrink.
The Office of the Superintendent of Financial Institutions' Residential Mortgage Underwriting Practices and Procedures guideline — the source of the stress test and most Canadian mortgage qualifying rules.
The ability to move your existing mortgage to a new property when you sell and buy simultaneously — keeping your rate and term without triggering penalties.
The artificially high rate lenders publicly advertise — rarely paid by actual borrowers, but used for IRD penalty calculations at Big 5 banks.
The fee charged when you pay off or break a mortgage early — the greater of three months' interest or the IRD calculation for fixed-rate mortgages.
The annual allowance for paying down extra principal without triggering a penalty — typically 15%, 20%, or 25% of the original mortgage balance.
The base interest rate each Canadian lender charges its most creditworthy customers, typically set about 2.00% above the Bank of Canada Policy Rate.
A non-bank, non-regulated mortgage lender — typically an individual, mortgage investment corporation (MIC), or syndicate — used for borrowers who can't qualify with traditional lenders.
A combined mortgage + HELOC product under one collateral charge, where principal paydown on the mortgage automatically increases the HELOC limit.
A loan secured against the equity in a property that already has a first mortgage — subordinated in priority and typically carrying higher rates.
A Canadian tax strategy that makes mortgage interest tax-deductible by systematically converting non-deductible mortgage debt into deductible investment loan debt via a readvanceable mortgage.
A traditional mortgage registration secured only for the exact mortgage amount — easier to transfer between lenders at renewal.
OSFI's November 2024 policy change that eliminated the stress test for uninsured mortgage renewals when switching lenders with unchanged amount, amortization, and payment schedule.
A mortgage qualifying rule requiring borrowers to prove they can afford payments at a rate higher than their actual contract rate — the greater of 5.25% or contract rate plus 2%.
A one-time insurance policy protecting you and your lender from title defects, fraud, encroachments, and survey issues — typically $200–$400 for the lifetime of ownership.
The percentage of your gross income consumed by housing costs plus all other debt payments — credit cards, car loans, student loans. Limit is typically 44%.
The rate at which a fixed-payment variable mortgage's monthly payment no longer covers the interest owed — forcing a payment increase or conversion.
A mortgage with 20% or more down payment where the lender carries default risk and no insurance premium is paid.
A mortgage where the interest rate is tied to Prime Rate and moves with every Bank of Canada Policy Rate decision.