Amortization Period
Number of years it takes to repay the entire amount of the mortgage.

Anniversary Period
Your anniversary period is the 12 month period that starts each year on your mortgage interest adjustment date or, if you have renewed or amended your mortgage, the effective date of your renewal or amendment

Closed Mortgage
A mortgage which cannot be prepaid, renegotiated or refinanced prior to the expiry of the term, except with compensation or breakage costs.

Closing Costs
Costs which are payable when the sale is closed. Standard closing costs include adjustments for prepayments of taxes, utilities and condominium common expenses, if any, made by the vendor; property land transfer taxes; property insurance; and legal/notarial fees.

Conditional Offer
An offer to purchase subject to specified conditions. These conditions could include the arranging of satisfactory mortgage financing, a satisfactory inspection or the selling of a present home. A time limit in which the specified conditions must be met should be stipulated in the offer to purchase.

Conventional Mortgage A first mortgage - the principal amount of which cannot exceed 75% of the lesser of Convertible Mortgage

A fixed-rate mortgage which offers the same security as a closed mortgage, but which can be converted to a longer, closed mortgage at any time without penalty.

Deed
The document prepared by a lawyer or notary containing a detailed description of the property which transfers ownership from the vendor to the purchaser. This document is then registered against the title to the property as evidence of ownership.

Deposit
A sum of money paid by the purchaser on making an offer. Usually held in trust by the real estate broker or the vendor's lawyer or notary until the closing of the sale.

Equity
The interest the owner holds in a property over and above all claims to the property. It is usually the difference between any outstanding mortgages and the market value of the property.

Fixed-rate Mortgage
The interest rate on a fixed-rate mortgage is set for a pre-determined term - usually between 6 months and 25 years - and cannot be renegotiated, except upon payment of breakage costs. Interest is calculated semi-annually, not in advance.

Interest Rate
Interest Rate The rate of return the lender receives for permitting the borrower to use the mortgage money for a specified term. The interest rate is usually expressed as an annual percentage rate, calculated semi-annually, not in advance.

Mortgage Default Insurance
This insurance is available in all areas and is mandatory forborrowers with a down payment of less than 25%. The minimum permissible down payment is 10% (5% for eligible first-time home owners only).

Mortgagee
A lender who advances a mortgage to a borrower, where repayment of the loan is secured by a charge on real property.

Mortgagor
A borrower who gives title to, or a charge on, real property to a mortgagee to secure repayment of a mortgage loan.

Offer to Purchase
A written contract setting forth the terms under which the buyer agrees to purchase a property. Upon acceptance by the seller, it forms a contract which determines the rights and obligations of the buyer and seller concerning the purchase and sale. It includes the legal and/or municipal description (this may consist of lot numbers as well as street address), purchase price, closing date, mortgage and terms of repayment, and lists specific items included or excluded from the sale.

Open Mortgage
A mortgage which can be prepaid at any time prior to maturity, without breakage costs.

Principal
The amount of the loan owed to the lender at any specified time, not including interest.

Term The length of time during which the specific mortgage agreement is effective. When the term expires, the balance of the principal is either repaid in full or the mortgage is renegotiated at then-current market rates and conditions.

Variable Rate Mortgage
An interest rate on a mortgage that fluctuates according to changes in the prime lending rate. A variable rate mortgage has payments which are fixed for the term, even though interest rates may fluctuate during that time. If interest rates go down, more of the payment is applied to reduce the principal; if rates go up, more of the payment is applied to payment of interest. Variable rate mortgages may be open or closed.