Refers to prime mortgage lending for the most creditworthy borrowers. These borrowers typically have excellent credit scores and stable incomes, qualifying them for the best available interest rates.

A classification of mortgages with slightly more risk than prime ("A") mortgages but less risk than subprime ("B") mortgages. This is often used for self-employed individuals or those with non-traditional income verification.

The total length of time it takes to pay off a mortgage in full, assuming regular payments and a constant interest rate. The standard maximum amortization for an insured mortgage in Canada is 25 years.

An independent, professional assessment of a property's market value. Lenders often require this to ensure the loan amount is justified by the home's value.

A floating-rate mortgage where the payment rises and falls with the lender's prime rate. Unlike a standard variable-rate mortgage (where payments stay static while the principal/interest ratio changes), an ARM's monthly payment changes directly with rate fluctuations.

Alternative lending for borrowers who may not qualify for prime (A-lending) rates due to lower credit scores, non-traditional income, or higher debt ratios.

Able to be approved for a mortgage at a traditional bank. This typically refers to a well-qualified prime customer.

An interest rate calculated when a borrower combines an existing mortgage rate with a new rate, often used when refinancing or porting a mortgage before the end of the term.

A short-term loan used to "bridge" the gap when a buyer’s closing date on their new home is before the closing date of the home they are selling.

A mortgage agreement that cannot be prepaid, renegotiated, or refinanced before maturity without paying a penalty. In exchange, closed mortgages typically offer lower interest rates.

A low-ratio mortgage where the borrower has a down payment of at least 20% of the property’s purchase price. Mortgage default insurance is not legally required for these loans.

The portion of the property's purchase price paid upfront by the buyer. The minimum down payment in Canada is 5% for the first $500,000 of a home's purchase price.

The difference between the current market value of your home and the outstanding balance of your mortgage. As you pay down your mortgage, or as the property value increases, your equity grows.

Short for financial institution. This typically refers to a regulated bank, credit union, trust, or insurance company.

Named after the Fair Isaac Corporation, it is a three-digit number ranging from 300 to 900 that lenders use to evaluate your creditworthiness.

A mortgage where the interest rate and regular payments remain exactly the same for the entire duration of the term.

A floating-rate mortgage. There are two flavours of floaters in Canada: Variable-rate mortgages and Adjustable-rate mortgages.

The Federal Open Market Committee (FOMC) is part of the U.S. Federal Reserve. Its vital role is to determine the monetary policy of the United States, which strongly influences Canadian bond markets and fixed rates.

When a lender grants payment relief to a borrower in financial need. It typically entails the lender pausing or reducing mortgage payments for a temporary period.

The percentage of your gross monthly income required to cover your basic housing costs (principal, interest, taxes, heating, and 50% of condo fees if applicable).

A revolving credit line secured by your home's equity. You can borrow up to a certain limit, pay it back, and borrow again, paying interest only on the funds you use.

A mortgage where the borrower has a down payment of less than 20%. In Canada, these mortgages must be insured by a provider like CMHC, Sagen, or Canada Guaranty.

A mortgage with 20% equity or more (a loan-to-value of 80% or less).

A ratio that compares the amount of the mortgage loan to the appraised value or purchase price of the property (whichever is lower). Calculated by dividing the loan amount by the property's value and multiplying by 100.

The final day of your current mortgage term. On this date, the mortgage must either be paid in full or renewed for a new term.

Often called "CMHC insurance," this protects the lender in case the borrower defaults. It is mandatory in Canada for down payments between 5% and 19.99%.

A flexible mortgage that allows the borrower to pay off the principal partially or fully at any time without penalty. Because of this flexibility, interest rates are generally higher than closed mortgages.

Transferring your existing mortgage—including its current interest rate, balance, and remaining term—to a new property when you move.

A preliminary commitment from a lender stating the maximum mortgage amount you qualify for, along with a locked-in interest rate for a specific period (usually 90 to 120 days).

The right to pay down a specific portion of your mortgage principal (usually 10% to 20% annually) before the end of your term without incurring a penalty.

The base interest rate that major banks charge their most creditworthy customers. It is directly influenced by the Bank of Canada's policy interest rate. Variable-rate mortgages are based on the lender's prime rate.

The process of replacing your existing mortgage with a new one, often to borrow additional funds against your home equity, consolidate debt, or secure a lower interest rate.

Signing a new mortgage agreement with your current lender for a new term once your existing term reaches maturity.

Stands for Real Estate Secured Lending. It encompasses any financing secured by residential properties, including standard mortgages and HELOCs.

The difference between two rates. For example, the spread between a competitive 5-year fixed mortgage rate and the 5-year government bond yield.

A federal qualifying rule used by lenders to determine if a borrower can afford their mortgage payments if interest rates rise. You must qualify at a rate that is generally 2% higher than your actual contract rate.

The percentage of your gross monthly income required to cover your housing costs (GDS) plus all other monthly debt obligations (car loans, credit cards, lines of credit).

In bond market parlance, tenor refers to the length of time remaining until a bond's maturity date.

The length of time your current mortgage agreement and interest rate are in effect (e.g., 1, 3, or 5 years). At the end of the term, you must renew the remaining balance.

The peak policy interest rate in a given Bank of Canada rate hike cycle.

Specifically for variable-rate mortgages with fixed payments. The trigger rate is the interest rate at which your regular payment is no longer large enough to cover the interest due, meaning nothing is going toward the principal.

A mortgage where the interest rate fluctuates based on changes to the lender's prime rate. Your regular payments may remain the same (with the amount going toward principal vs. interest shifting) or they may fluctuate, depending on the specific product.