Property Words and Phrases

A guide to useful words, terms and phrases relating to buying or renting a house or apartment in Canada...

The key words you need when reading the property papers, preparing to buy or rent property and dealing with real estate agents and mortgage brokers in Canada.

Words and terms are listed alphabetically.

Term Definition
Appraisal Review of property that determines the market value of a property
Approved Lender Lending institution authorised by the Government of Canada
Assumption Legal document signed by a buyer requiring them  to assume responsibility for the obligations of a mortgage
Blended Payment A mortgage payment that includes principal and interest which is paid regularly during the term of the mortgage
Building Permit A certificate that must be obtained by the property owner or contractor before a building can be erected or repaired
Buyer's Market When there are more homes to choose from than buyers in comparison. In this market prices of homes tend to be lower, giving buyers more power in negotiating a purchase price
Closed Mortgage Mortgage with a locked-in payment schedule, which does not vary over the life of the mortgage term
Closing Costs Additional costs of purchasing a property, on top of the purchase price, such as legal and transfer fees, disbursements
Closing Date The date on which the sale of a property becomes final sometimes referred to as settlement
CMHC Canada Mortgage and Housing Corporation (CMHC): a Crown corporation administering the National Housing Act
Commitment Letter Commitment Letter or Mortgage Approval is written notice from the mortgage lender advising the borrower that the mortgage has been approved
Conditional Offer Conditional Offer or Conditions of Sale: an Offer to Purchase that is subject to certain conditions
Conventional Mortgage A mortgage loan up to a maximum of 75% of the lending value of the property
Covenant A clause in a legal document which, in the case of a mortgage, gives the parties to the mortgage a right or obligation
Conveyancing The transfer of ownership of any property from one person to another
Deed A legal document, which is signed by both the vendor and the purchaser transferring ownership
Default When a party fails to abide by the terms of a mortgage loan agreement
Deposit A sum of money paid by the purchaser which is placed in trust when an Offer to Purchase is accepted
Discharge of Mortgage A document signed by the lender when a mortgage obligation has been fulfilled by the borrower
Down payment The portion of the house price the buyer must pay up front from personal finances, before obtaining a mortgage
Easement A legal right for access to or over, or for the use of, another person's land for a specific purpose
Encumbrance A registered claim for debt against a property
Equity The difference between the price for which a property could be sold and the total debts registered against the property
Interest The cost of borrowing money which is usually paid to the lender in installments, in combination with repayment of the principal loan amount
Interest Rate The rate at which a borrower pays interest to the lender
Lien A claim or legal right against a property for money owing
Maturity Date The last day of the term of the mortgage agreement when the mortgage must be paid in full or the agreement renewed.
Mortgage Life Insurance Insurance to pay off your mortgage in full if you die
Mortgage Loan Insurance Insurance required by lenders for high-ratio mortgages
Mortgage Payment A regular payment by the borrower that includes both principal and interest
Mortgagee The lender
Mortgagor The borrower
Net Worth A person's total financial worth, calculated by subtracting total liabilities from assets
Offer to Purchase A written contract setting out the terms under which the buyer agrees to buy and seller agrees to sell
Pre-Approved Mortgage When a lender approves the potential mortgagor for a specified amount
Principal The amount of money borrowed
Property Purchase Property Purchase (Land Transfer Tax) is a tax paid to the provincial and/or municipal government(s) for transferring property
Survey A document, often required prior to purchase outlining the property boundaries and measurements and indicates any easements or encroachments present on the title
Term The time length of the mortgage loan
Title Legal document which shows ownership of property, as well as any interests of any other parties