Recourse Loan
Understand recourse loans in Canadian real estate — what they are, how they work, and their impact on borrower liability.
August 08, 2025
What is a Recourse Loan?
A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.
Why Recourse Loans Matter in Real Estate
In Canadian real estate financing, recourse loans increase lender security but expose borrowers to greater personal liability.
Key points:
- Lender can claim collateral property and other assets
- Common for residential mortgages and small commercial loans
- Typically has lower interest rates than non-recourse loans
Understanding recourse loans helps borrowers evaluate risk and negotiate terms.
Example of a Recourse Loan in Action
The homeowner’s mortgage was a recourse loan, meaning the lender could pursue other assets if the property was sold for less than the outstanding debt.
Key Takeaways
- Allows lender to pursue borrower’s assets beyond collateral
- Common for most residential mortgages
- Increases borrower’s personal liability
- May offer lower interest rates
- Important factor in borrower risk management
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.
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)
