The mortgage interest rates offered in the market at a specific, relevant point in time.

The last day of a current mortgage’s term. This is sometimes also called the mortgage Renewal Date.

This is a legal agreement by which a lender lends money in exchange for taking title of the borrower’s property, with the condition that the conveyance of title becomes void once the loan has been paid in full.

This is the mortgage insurance paid by a mortgage lender, on behalf of the borrower, to one of Canada’s mortgage insurers to protect itself against borrower mortgage default. Only insurable, conventional mortgages are eligible for lenders to back-insure.These mortgages are insured, but unlike mortgages where the borrower has less than 20% down payment, the lender pays the mortgage insurance premium and not the borrower. Lenders typically choose to back-insure all eligible mortgages since it affords them bigger protection against borrower default.

Canada currently has three federally regulated mortgage loan insurers; The Canadian Mortgage and Housing Corporation, Genworth Canada and Canada Guaranty. Their mandate is to make homeownership possible for a borrower with less than 20% down payment at competitive interest rates and insure eligible mortgage lenders against borrower default.

When breaking your mortgage for any reason, prior to the mortgage term maturity date, the borrower pays the lender a penalty for breaking the contract; these penalties are called pre-payment penalties. Mortgage penalties are defined in the lender’s mortgage Standard Charge Terms and are typically determined by the interest rate type, mortgage type, posted rates and the mortgage type. Pre-payment penalties can be exorbitant and should be understood and investigated by every borrower prior to entering into a mortgage.

Every mortgage has privileges defined in the Mortgage Standard Charge Terms. A borrower can avoid mortgage penalties by exercising these privileges. These privileges can include but are not limited to: Portability, Assumability, Pre-payment payments etc. Not all mortgages have the same privileges and these should be thoroughly investigated and understood prior to entering into a mortgage.

At the end of a mortgage term the borrower may either keep their mortgage with their current lender but at new, mutually agreed terms and conditions, interest rate etc. or they may negotiate a new mortgage with a different lender. This is called “renewing your mortgage”. If the mortgage is not renewed, the current lender is entitled to be paid in full on the maturity date.