This is the total length of time it’ll take to pay off your mortgage in full, assuming you stick to your regular payments. Most amortization periods run 25 to 30 years, but yours might be shorter or longer depending on your down payment and mortgage type.

Think of it as the big picture timeline, separate from your mortgage term, which is just one part of that story.

Mortgage terms and amortization - Canada.ca

Before a lender approves your mortgage, they’ll want to know the property is actually worth what you’re paying for it. That’s where an appraisal comes in: a licensed professional inspects the home and gives it an official value based on things like size, condition, location, and recent sales of similar properties nearby. It protects you and your lender from overpaying.

A basis point is a slice of a percentage, 1/100th of one percent. So, if your mortgage moves from 25 basis points, that’s a 0.25% change.

Glossary of Terms - Office of the Superintendent of Financial Institutions

With a closed mortgage, you agree to a fixed set of conditions like rate, payment schedule, and term length during your term. In exchange for that structure, you’ll usually get a lower interest rate than an open-term mortgage.

The closed-term mortgage offers limited prepayment options during the term.

At Haventree Bank, full prepayment is allowed, but a prepayment charge applies:

The greater of:

- 3 months’ interest at the rate of the mortgage calculated on the mortgage amount being prepaid; or

- The interest rate differential (IRD), based on the difference in the interest calculated on the loan amount being prepaid and our then current reinvestment rate.

- Our reinvestment rate is the rate that we could earn on the amount of prepaid funds for the remaining term of the mortgage to be prepaid.

You can make one prepayment each year without charge. For details, see our prepayment options section.

These are the extra expenses that come with finalizing your home purchase, on top of your down payment. Legal fees, land transfer tax, title insurance, and appraisal costs can be considered closing costs. A good rule is to budget 1.5% to 4% of your purchase price to cover them so you have no surprises on closing day.

Buying a home - Canada.ca

This is the official day ownership of the property changes hands. When the legal paperwork is signed, funds are transferred, and the keys become yours. It’s the finish line of the home-buying process, and everything from your mortgage funding to your moving arrangements gets scheduled.

A co-applicant is someone who applies for the mortgage alongside you and shares responsibility for repaying it, but who won’t necessarily be listed on the property title. Adding a co-applicant can strengthen your application by combining incomes, which may help you qualify for more.

Similar to a co-applicant, a co-borrower shares responsibility for mortgage payments, and they’re also named on the property’s title, meaning they have legal ownership of the home. It’s a common setup for partners or family members buying a property together.

When you get a mortgage, your lender registers a legal claim (called a charge) on your home. There are two main types: standard (conventional) charge and collateral charge.

Collateral charge:

- A collateral charge is registered for an amount greater than your actual mortgage and may cover more than one loan from the same lender.

- It’s re-advanceable, meaning you could borrow more in the future without needing to refinance.

- Switching to another lender may require refinancing.

- Even if you have paid off your mortgage, the collateral charge will only be discharged once all the loans secured by the charge have been repaid. This can involve additional legal steps.

Please note: Haventree Bank only offers standard mortgage charges.

This is an offer to purchase a home that’s contingent on certain boxes being checked first, things like financing approval, a satisfactory home inspection, or the sale of your current home. If those conditions aren’t met within the agreed timeframe, either party can typically walk away from the deal.

A convertible term mortgage is a short-term mortgage that your lender may convert into a long-term mortgage. When your lender converts or extends your mortgage, your interest rate changes.

At Haventree Bank, our 12-month Convertible Mortgage offers you flexibility in a declining rate environment. You can switch to a longer-term fixed rate at any time during the 12-month term, with no penalty.

Mortgage terms and amortization - Canada.ca

This is the initial sum of money you put down to show you’re serious about buying a home, usually submitted along with your purchase offer. It’s held in trust and later applied toward your down payment at closing.

Your down payment is the portion of the home’s purchase price you pay upfront, in cash before your mortgage covers the rest. The size of your down payment affects how much you’ll need to borrow, whether you’ll need mortgage default insurance, and what your monthly payments look like.

Equity is the portion of your home you truly “own”. Which means the difference between what your home is worth and what you still owe on your mortgage. It grows over time as you pay down your principal and as your property’s value increases, and it can become a valuable financial resource down the road.

Known as an FHSA, this is a registered savings account designed to help you save for your first home. Contributions are tax-deductible, and qualifying withdrawals, including any growth, come out tax-free when it’s time to buy. It’s one of the most efficient ways to save toward a down payment.

With a fixed-rate mortgage, your interest rate stays exactly the same for the entire length of your term. That means your payments stay predictable, no matter what happens in the broader rate environment.

Please note: Haventree Bank currently only offers fixed-rate mortgage options.

Your gross debt service, or GDS, ratio compares your housing costs (mortgage payments, property tax, heating, and condo fees if applicable) to your gross household income. Lenders use it to gauge how comfortably you can afford a mortgage, and generally like to see it under 39%.

If your down payment is less than 20% of the home’s purchase price, your mortgage is considered high ratio. In this case, mortgage default insurance is required to protect the lender, since you’re borrowing a larger share of the home’s value.

A home inspection is a thorough, professional walkthrough of a property to check its condition. From the roof and foundation to plumbing, electrical, and everything in between. It helps you understand what you’re really buying and can flag issues worth negotiating on, or walking away from.

This type of mortgage lets you roll the cost of home renovations or repairs into your mortgage amount, so you can finance improvements at your mortgage rate rather than through higher-interest borrowing.

Planning to renovate? Our Improvements Mortgage lets you add up to $100,000 to your mortgage to help cover renovation costs when purchasing or refinancing your home.

More Info

This is the cost of borrowing money, shown as a percentage of your mortgage amount. It determines how much interest you’ll pay on top of what you borrowed, and it plays a major role in shaping the size of your monthly payments.

These are the costs charged by a real-estate lawyer or notary to handle the legal side of your home purchase (reviewing contracts, registering the title, transferring funds, and making sure everything is done properly). They’re a standard part of your closing costs.

A longer-term mortgage locks in your rate and conditions for an extended period, typically 3 (5?) years or more.

Long-term mortgages have a term greater than 5 years. With a longer term, you keep the conditions of your mortgage contract for longer.

You may:

• only have the option of a fixed interest rate

• lock-in an interest rate for a longer period

• pay a substantial prepayment penalty if you sell your home within the first 5 years of your term

Mortgage terms and amortization - Canada.ca

This marks the last day of your current term. The point where your agreement with your lender ends. At maturity, you’ll need to renew, refinance, or pay off your mortgage in full.

A mortgage is a loan used to buy property, secured by that property itself. In simple terms, your lender gives you the funds to purchase your home, and your home acts as collateral until the loan is fully repaid.

This is the regular amount you pay your lender (monthly, biweekly, or on whatever schedule you choose) to pay down your mortgage. Each payment typically covers both principal (the amount you borrowed) and interest (the cost of borrowing it).

Getting pre-approved means a lender has reviewed your finances and confirmed, in advance, how much you’re likely able to borrow and at what rate. It gives you a clear budget to shop with and shows sellers you’re a serious, ready buyer.

Refinancing means replacing your current mortgage with a new one, often to access equity, secure a better rate, or change your mortgage terms. It’s a useful tool for consolidating debt, funding big expenses, or simply adjusting your mortgage to better fit your life.

When your term ends, renewal is the process of signing on for a new term with either your current lender or a new one. Renewing your mortgage gives you the opportunity to review your current financial goals and make sure your mortgage still meets your needs.

Your mortgage term is the length of time your current agreement (including your rate and conditions) stays in effect, typically ranging from a few months to 5 years or more. This is a small part within your larger amortization period, and you’ll revisit your options at the end of each one.

Mortgage terms and amortization - Canada.ca

An open term mortgage gives you the freedom to pay off part or all of your mortgage at any time, without penalty. That flexibility usually comes with a higher interest rate than a closed term, making it a good fit if you’re expecting a big payment or planning to sell soon.

This is simply how often you make your mortgage payments (monthly, biweekly, weekly). Choosing a more frequent schedule can help you pay down your mortgage faster and save on interest over time.

If you pay off more than your allowed limit or break your mortgage before the end of your term, your lender may charge a prepayment penalty to cover their lost interest. The amount varies depending on your mortgage type and how much time is left on your term.

You may be charged a prepayment penalty if you:

- Partially prepay amounts higher than allowed by your prepayment privileged amount outlined in the mortgage documents.

- Refinance your mortgage before your maturity date.

- Transfer your closed mortgage to another lender before the maturity date.

- Pay off your mortgage in full before the end of your term.

*For fixed-rate mortgages, prepayment charges are based on the interest rate differential (IRD) or three months’ interest, whichever is greater.

Prepayment charges depend on the timing of your payment, the amount, and changes in interest rates. To estimate how these factors affect your fees, use our prepayment calculator.

In addition to any prepayment penalty, an administration fee may apply for discharging your mortgage.

These are the various ways your mortgage allows you to pay down your balance faster than scheduled. Whether that’s through lump-sum payments, increasing your regular payment amount, or adjusting your payment frequency.

You can make lump sum payments toward your mortgage principal before the maturity date. If these payments are made outside the prepayment privileges outlined in your mortgage agreement, prepayment charges may apply. Be sure to review your mortgage terms to understand when and how much you can prepay without penalty.

This is the specific limit your mortgage sets on how much extra you can put toward your principal each year without penalty.

At Haventree Bank, each year, at the anniversary date* of your mortgage advance, you can take advantage of the following prepayment options:

- Increase the principal and interest portion of your original payment by up to 20%, and/or

- Make a lump sum payment of up to 20% of your original mortgage amount (minimum $500) toward your outstanding balance.

This second option is not cumulative. Any unused portion of the 20% doesn’t carry over the following year.

* Your mortgage anniversary date can be found in your mortgage documents.

This is the actual amount of money you borrowed from your lender to buy your home, not including interest. As you make mortgage payments, this balance gradually goes down, building your equity along the way.

Property insurance protects your home and its contents against risks like fire, theft, and certain types of damage. Lenders typically require it for the life of your mortgage, since your home is the collateral securing your loan.

This is the annual tax charged by your municipality based on your property’s assessed value and used to fund local services such as schools, roads, and emergency services. Depending on your setup, you may pay it directly or have it collected as part of your regular mortgage payment.

This type of mortgage is designed for properties you plan to rent out rather than live in yourself. Qualification requirements, down payment minimums, and interest rates can differ from a mortgage on your primary residence, since lenders view rental properties as a different kind of risk.

More info

A second mortgage is an additional loan taken out against a property that already has a mortgage, using the equity you’ve built as collateral. It sits behind your first mortgage in priority and can be a way to access funds for renovations, debt consolidation, or other big expenses.

A short-term mortgage locks in your rate and conditions for a brief period, often a few months to 3 years. It’s a good option if you expect rates to drop, want more frequent chances to reassess your mortgage, or are planning a move in the near future.

A shorter-term mortgage usually ranges from 1 to 2 years. On the current website

Most Canadian mortgage holders have a term of 5 years or less. These are short-term mortgages. With a shorter term, you renew your mortgage contract sooner.

You may:

• choose a fixed or a variable interest rate

• take advantage of a lower interest rate when you sign up

Mortgage terms and amortization - Canada.ca

When you get a mortgage, your lender registers a legal claim (called a charge) on your home. There are two main types: standard (conventional) charge and collateral charge.

Standard charge (also called a conventional ortgage charge):

- A standard charge is registered only for the amount of your mortgage. For example, if you borrow $500,000, the charge is registered for $500,000.

- If you wish to borrow more, you will need to refinance, discharging the original mortgage and registering a new one.

- Once your mortgage is fully repaid, it is removed from your property title.

This type of charge makes switching lenders in the future simpler.

Please note: Haventree Bank only offers standard mortgage charges.

Short for mortgage term, this is the length of time your current mortgage agreement, including its rate and conditions, is locked in, before you need to renew. It’s a portion of your overall amortization period, not the whole time.

Title refers to the legal ownership of a property. Being “on title” means your name is officially registered as an owner, giving you legal rights to the home.

This is a one-time insurance policy that protects you and your lender against issues with the property’s title, like fraud, undisclosed liens, or errors in public records. It offers peace of mind that your ownership is secure and free of unexpected legal surprises.

Your total debt service, or TDS, ratio compares all of your monthly debt obligations. Housing costs plus things like car loans and credit card payments, to your gross household income. Lenders use it alongside your GDS ratio to assess affordability.

A variable-rate mortgage changes with the prime interest rate. When interest rates decrease, a larger portion of your payment is applied toward your principal. When interest rates rise, a larger portion of the payment goes toward interest.

Please note: Haventree Bank currently only offers fixed-rate mortgage options.