Amortization
The total time to pay off your mortgage in full — commonly 25 years. Longer amortization lowers the payment but raises total interest.
Blend and extend
Combining your current rate with a new one and extending the term, often to avoid a full break penalty when refinancing.
Closing costs
One-time costs to complete a purchase — land transfer tax, legal fees, title insurance, appraisal. Budget 1.5–4% of price.
Conventional mortgage
A mortgage with 20% or more down payment. No default insurance is required.
Fixed rate
An interest rate locked for the whole term. Your payment and rate don’t change, whatever the Bank of Canada does.
Gross debt serviceGDS
The share of your gross income going to housing costs — mortgage, property tax, heat, half of condo fees. Lenders typically cap it around 39%.
High-ratio mortgage
A mortgage with less than 20% down. It requires mortgage default insurance and usually carries a lower rate than uninsured.
Home equity line of creditHELOC
A revolving credit line secured against your home. You borrow, repay and re-borrow up to a limit, paying interest only on what you use.
Interest-rate differentialIRD
A prepayment penalty on fixed mortgages based on the rate gap between your contract and current rates. Can be large — often the biggest cost of breaking early.
Loan-to-valueLTV
Your mortgage as a percentage of the property’s value. 20% down means an 80% LTV.
Mortgage default insuranceCMHC
Insurance protecting the lender if you default, required on high-ratio mortgages. The premium is usually added to your mortgage.
Porting
Moving your existing mortgage and its rate to a new property when you sell and buy, avoiding a penalty.
Prepayment privilege
How much extra you can pay each year without penalty — often 15–20% of the original balance, plus a payment increase.
Prime rate
The benchmark lenders set most variable products against. It moves closely with the Bank of Canada’s overnight rate.
Rate hold
A lender’s guarantee to honour a quoted rate for a set window (often 90–120 days) while you shop or close.
Refinance
Replacing your existing mortgage with a new one — to lower the rate, access equity, or consolidate debt. May trigger a break penalty.
Stress test
A federal rule requiring lenders to qualify you at the higher of your rate + 2% or 5.25%, to check you could handle higher payments.
Term
The length of your current mortgage contract (e.g. 5 years), after which you renew. Different from amortization, which is the full payoff period.
Total debt serviceTDS
GDS plus all your other debt payments. Usually capped around 44% of gross income.
Variable rate
A rate that moves with your lender’s prime rate. Usually lower to start, but exposed to increases and decreases.