Mortgage
Explore how mortgages work in Canadian real estate, what terms they include, and how buyers qualify, repay, and manage home loans.
May 22, 2025
What is a Mortgage?
A mortgage is a loan used to finance the purchase of real estate, where the property serves as collateral for the debt.
Why Mortgages Matter in Real Estate
In Canadian real estate, mortgages allow buyers to purchase homes without paying the full price upfront. The buyer repays the loan over time, with interest, according to the mortgage’s terms.Key mortgage components include:
- Principal: the loan amount
- Interest: cost of borrowing
- Term: the length of the contract (e.g., 5 years)
- Amortization: the full repayment timeline (e.g., 25 years)
- Payment frequency and type (fixed or variable rate)
Understanding mortgages helps buyers navigate borrowing decisions, budgeting, and repayment planning.
Example of a Mortgage in Action
A buyer borrows $450,000 at a fixed rate of 4.9% for a 25-year amortization, with a 5-year term and monthly payments.
Key Takeaways
- Primary loan for purchasing property.
- Repaid with interest over time.
- Includes term, amortization, and rate type.
- Must meet lender criteria.
- Registered on property title.
Related Terms
- Interest Rate
- Mortgage Term
- Amortization
- Mortgage Pre-Approval
- Refinance
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
Highlights from the Delta Golf & Country Club listing brochure. (Colliers)
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)
