Mortgage

Explore how mortgages work in Canadian real estate, what terms they include, and how buyers qualify, repay, and manage home loans.

Mortgage

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)
Buyers must meet lender requirements and pass a stress test to qualify. Mortgages are registered on title and must be discharged when paid off or when the property is sold.
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

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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