Amortization Period - The actual number of years it will take to repay a mortgage loan in full. This period of time is longer than the term of the mortgage.  You can have an amortization period of up to 40 years.

Appraised Value - The value of the property offered as security for a mortgage loan. This appraisal is done for the mortgage lender and by an independent appraisal company.  (Most of the time it is paid for by the buyer.)

Canada Mortgage and Housing Corporation (CMHC) - The Corporation of the Federal Government that administers the National Housing Act (NHA) and provides mortgage insurance to lenders.

Closed Mortgages - A closed mortgage agreement is locked in for the term of the mortgage. A lender may permit payout under certain circumstances but most of the time you will pay a penalty of 3 months interest or an interest rate differential whichever is higher.

Closing Date – The day on which you pay for the property and the title transfers into your name.

Contract of Purchase and Sale - A formal, legal agreement that offers a certain price for a specified property.

Conventional Mortgage - Mortgage that does not exceed 80% of the lesser of the appraised value or the purchase price of the property. A mortgage that exceeds 80% must be insured.

Debt Service Ratios (GDSR & TDSR) - The Gross Debt Service Ratio (GDSR) is the percentage of gross annual income needed to cover payments associated with housing (mortgage principal and interest, taxes, secondary financing, heating, and 50% of condominium fees, if any). The GDSR usually will not exceed 32% of gross annual income. The Total Debt Service Ratio (TDSR) is the percentage of gross annual income required to cover payments associated with housing and all other debts and obligations, such as payments on a car loan and a credit card. The TDSR usually will not exceed 40% of gross income. For self-employed and commission salespeople, net income is used for GDSR and TDSR ratio calculations.

Down Payment - The amount of money put toward the purchase by the purchaser. It represents the difference between the purchase price and the amount of the mortgage loan.

Equity - Equity is the difference between the value of a property and the total amount owed against it.

Fixed Rate Mortgage - A mortgage where the rate of interest is fixed for a specific term.

Genworth – Formerly GE Capital Mortgage Insurance Company of Canada , a private mortgage insurer that can be used instead of CMHC.

High Ratio Mortgage - Mortgage that exceeds 80% of the lesser of the appraised value or purchase price of the property. This mortgage will be insured and borrowers must pay an application fee and the insurance premium (which may be added to the mortgage) to the insurer.

Interest Adjustment Date (I.A.D.) - A date, usually one month before monthly mortgage payments begin, when interest on monies advanced before that date is calculated and must be paid by the borrower.

Leasehold Mortgage - A mortgage loan on a home where the building is on leased (rented) land. The lender takes an interest in the lease.

Loan-to-Value Ratio - The ratio of the loan to the appraised value or purchase price of the property, whichever is less, expressed as a percentage.

Maturity Date - The last day of the term of the mortgage agreement. The mortgage agreement must then be renewed or the mortgage balance paid in full.

Mortgagee - The lender

Mortgagor - The borrower

Open Mortgages - An open mortgage permits for prepayment/repayment at any time without penalty.

P.I.T. - Principal, interest, and taxes.

Possession Date – The day you take possession of the keys to the property and get to start moving.

Prepayment Penalty - A fee charged by the lender when the borrower pays off all or a portion of a mortgage more quickly than provided for in the mortgage agreement.

Refinance - Arranging a new mortgage for an increased amount. The old mortgage(s) is paid off (discharged) from the proceeds of the new loan. This type of loan is also referred to as "equity take out."

Renewal - Extending a mortgage agreement with the same lender for another term. At this time, the length of the term and the conditions may be changed.

Strata - A form of ownership in which the owner has title to a dwelling unit and owns a share of the common elements (such as elevators, hallways and the land).

Term - The length of a mortgage agreement. As the amortization period is longer than the term, mortgage payments usually do not fully cover the outstanding principal by the end of the term.

Variable Rate Mortgages - A variable rate mortgage is where the rate of interest changes as money market conditions change, usually not more than once a month. The monthly payment stays the same for a specified period; however, the amount applied towards the principal changes according to the changes (if any) in the rate of interest.