HopeWell Mortgage Dictionary

Default and Enforcement

90-day late payment

A credit account reported approximately three payment cycles past due. It is generally more serious than an isolated 30-day late payment and may indicate continuing financial stress.

Legal and Title

Absolute title

A Land Titles classification providing strong registered-title protection subject to statutory exceptions and entries on the register.

Commercial Mortgages

Absorption period

The time required for a market to lease or sell available space at expected demand. Development and commercial lenders use it to stress stabilization timing.

Property and Appraisals

Abutting property

Land sharing a boundary with the subject property. Access, encroachment, easement and environmental issues may involve neighbouring land.

Default and Enforcement

Acceleration clause

A mortgage provision allowing the lender to declare the entire unpaid balance immediately due after a specified default, rather than collecting only the missed instalments. Acceleration commonly precedes enforcement.

Income and Employment

Acceptable income

Income a specific lender is willing to include after applying its verification, stability, continuity and calculation rules. Actual cash received may differ from qualifying income.

Credit and Debt

Account dispute

A consumer challenge to information reported on a credit file. A dispute does not automatically remove the obligation or require a lender to ignore the account.

Rates and Payments

Accrued interest

Interest that has been earned by the lender but has not yet been paid. It may accumulate between payment dates, during arrears, or where a mortgage provides for interest to be paid at maturity.

Mortgage Basics

Accrued principal

Principal that has become due under the payment schedule but remains unpaid. It matters because arrears can include principal, interest, taxes, fees and enforcement costs rather than one missed instalment alone.

Property and Appraisals

Acreage adjustment

An appraisal or lender adjustment recognizing that excess land may not contribute value proportionally or may fall outside residential policy.

Rates and Payments

Actual payment

The contractual amount the borrower must pay, as distinct from the higher qualifying payment used in a stress test. Budgeting should use the actual payment while approval analysis may use both.

Income and Employment

Add-back

An underwriting adjustment that adds an eligible expense or non-cash item back to reported income. Add-backs are policy-specific and must not be counted twice.

Commercial Mortgages

Additional rent

Commercial lease amounts paid beyond base rent, commonly for taxes, operating costs or common-area expenses. Recoverability depends on the lease.

Business Financing

Additional security

Property or rights pledged in addition to the primary mortgaged property. Examples include a second property, a general security agreement, an assignment of rents, or a personal guarantee.

Rates and Payments

Adjustable-rate mortgage (ARM)

Also: ARM

A variable-rate mortgage in which the required payment changes when the lender’s reference rate changes, keeping the amortization more closely on track.

Regulation and Compliance

Administrator / mortgage administrator

Ontario-specific. A person or company licensed by FSRA to receive mortgage payments from borrowers and distribute funds to lenders or investors, maintain records, issue statements, and perform other administration functions.

Closing and Funding

Advance date

The date mortgage funds are released by the lender. Interest, per-diem adjustments, registration and the first payment cycle may all depend on this date.

Closing and Funding

Advance rate

The percentage of eligible cost, completed value, receivables or collateral that a lender will finance. It is common in construction, commercial and asset-based lending.

Credit and Debt

Adverse credit event

A missed payment, collection, judgment, insolvency or other event that weakens credit assessment. Cause, recency, severity and recovery matter more than the label alone.

Mortgage Qualification

Aggregate loan-to-value

Total secured debt across the relevant property or collateral pool divided by accepted value. It matters when several mortgages, HELOCs or blanket-security properties exist.

Closing and Funding

Agreement of Purchase and Sale (APS)

Also: APS

The contract between a buyer and seller setting out the price, deposit, closing date, conditions, inclusions, exclusions, and other terms of a real-estate purchase.

Property and Appraisals

Agricultural appraisal

A valuation of farmland and agricultural improvements that may also address productivity, soil, buildings and market factors. Specialized expertise is often required.

Regulation and Compliance

All-in borrowing cost

The combined economic cost of interest, lender fees, brokerage fees, legal costs and other required charges over the relevant period. It is more informative than the stated rate alone.

Alternative Lending

Alternative lender

A lender outside the traditional prime-bank channel that may accept non-standard income, weaker credit, higher debt ratios, unusual properties, or other situations that do not fit prime underwriting.

Rates and Payments

Amortization

The period over which scheduled payments would reduce the mortgage balance to zero if the interest rate and payment assumptions remained unchanged. Amortization is different from the term.

Rates and Payments

Amortization schedule

A table showing how each mortgage payment is allocated between principal and interest and how the balance declines over time.

Commercial Mortgages

Anchor tenant

A major tenant whose presence supports traffic, occupancy or value. Its credit quality and lease expiry can materially affect financing.

Rates and Payments

Annual interest cost

The amount of interest projected or paid during a year. It should not be confused with APR, total cost of borrowing or the mortgage payment.

Rates and Payments

Annual percentage rate (APR)

Also: APR

A standardized annual expression of borrowing cost that includes interest and specified non-interest charges under applicable disclosure rules. The exact inclusions depend on law and transaction type.

Mortgage Qualification

Applicant strength

The combined quality of income, credit, assets, liquidity, experience and repayment history. It does not replace property or transaction approval.

Default and Enforcement

Application expiry

The date after which a lender will no longer rely on an approval or application without re-underwriting. Income, credit, rate, appraisal and documents may need updating.

Property and Appraisals

Appraisal

An independent opinion of a property’s market value prepared by a qualified appraiser. A lender may rely on an appraisal to establish lending value, marketability, condition, and sometimes rental income.

Property and Appraisals

Appraisal Institute of Canada (AIC)

Also: AIC

A Canadian professional appraisal organization whose common residential and commercial designations include CRA and AACI.

Mortgage Qualification

Approval condition

A requirement that must be satisfied before a lender will advance funds. An approval containing conditions is not the same as a fundable mortgage.

Mortgage Qualification

Approval in principle

An informal or conditional indication that a transaction may fit based on available information. The phrase is used inconsistently and should never replace a written commitment review.

Construction Financing

Architect’s certificate

A professional confirmation of construction progress, completion or compliance used in draw and project administration.

Default and Enforcement

Arrears

Amounts that should already have been paid but remain unpaid, such as mortgage payments, property taxes, condominium fees, insurance premiums, or support obligations.

Construction Financing

As-completed value

The appraiser’s opinion of property value after specified construction or renovation is completed. It depends on assumptions that must be fulfilled.

Property and Appraisals

As-is value

The appraiser’s opinion of value in the property’s current condition and legal state. A lender may advance against the lower current value during construction.

Mortgage Qualification

Asset depletion

Using verified financial assets as a basis for qualifying income under a lender-specific program. The calculation, eligible assets and required remaining balance vary by lender.

Commercial Mortgages

Assignment of leases and rents

A security document assigning rental income and lease rights to a lender. It is common in rental, commercial, and private mortgage transactions and may become enforceable after default.

Legal and Title

Assignment of mortgage

A transfer of a lender’s interest in a mortgage to another lender or investor. In Ontario, an assignment may be registered on title.

Mortgage Basics

Assumption of mortgage

An arrangement under which a buyer takes over an existing mortgage, subject to the lender’s approval and the mortgage terms. The original borrower may remain liable unless formally released.

Mortgage Basics

Authorized limit

The maximum amount available under a revolving or collateral facility. Some lenders assess the outstanding balance while others consider the authorized exposure in specific contexts.

Credit and Debt

Authorized user

A person permitted to use another person’s credit account without necessarily being contractually liable for the balance. Credit-report treatment can vary.

Property and Appraisals

Automated valuation model (AVM)

Also: AVM

A technology-based estimate of property value using sales and property data. An AVM may support underwriting but is not always accepted in place of a full appraisal.

Income and Employment

Average income

Income calculated across multiple periods to smooth variable earnings. Lenders may use a two-year average, lower year or another conservative method.

Alternative Lending

B lender

An informal industry term for a lender serving borrowers who do not meet prime-bank guidelines. B lenders often focus on stronger equity, marketable properties, and an identifiable path back to prime financing.

Mortgage Renewal

Balance at maturity

The principal and other amounts remaining due when the mortgage term ends. It must be renewed, refinanced, transferred, sold or repaid.

Mortgage Renewal

Balance transfer

Moving debt from one credit facility to another, often to obtain a lower temporary rate. It can affect utilization, qualifying payments and the borrower’s debt-consolidation plan.

Rates and Payments

Balloon payment

A large payment due at the end of a loan because regular payments did not fully amortize the debt.

Rates and Payments

Bank of Canada policy interest rate

The Bank of Canada’s target for the overnight rate. It influences prime rates and variable mortgage pricing, but fixed mortgage rates are also affected by bond yields and funding costs.

Mortgage Renewal

Bank statement program

An alternative-documentation program that estimates supportable self-employed income from business or personal account activity. Transfers, loans, taxes and non-recurring deposits must be excluded according to lender policy.

Default and Enforcement

Bankruptcy discharge

The legal release of a bankrupt from specified debts after the applicable process. Secured debt, fraud claims and other exceptions require legal review.

Commercial Mortgages

Base rent

The primary rent payable under a lease before additional rent or recoveries. It should be distinguished from gross collected revenue.

Rates and Payments

Basis point (bps)

Also: bps

One one-hundredth of one percentage point. For example, 25 basis points equals 0.25%.

Credit and Debt

Beacon score

An older industry term commonly used to refer to an Equifax credit score. The exact model used by a lender may differ from a consumer score.

Rates and Payments

Benchmark payment

A payment calculated using a qualifying rate, amortization or policy assumption rather than the contract terms. It is used to test repayment capacity.

Rates and Payments

Beneficial interest

The economic or equitable interest enjoyed by a person even when registered title is held by someone else. It must be disclosed where material.

Regulation and Compliance

Beneficial ownership verification

The process of identifying and reasonably confirming the individuals who ultimately own or control an entity. Mortgage-sector FINTRAC obligations can apply.

Income and Employment

Benefit income

Income from a government, employer or insurer benefit. Eligibility depends on amount, duration, taxation, documentation and lender policy.

Real Estate Investment

Blanket mortgage

A single mortgage secured against two or more properties. Releases of individual properties usually require the lender’s consent and may require a partial paydown.

Rates and Payments

Blended payment

A payment combining principal and interest in one regular amount.

Rates and Payments

Blended rate

A rate produced by combining an existing mortgage rate with a new rate, commonly when a borrower increases a mortgage before maturity without fully breaking the original mortgage.

Mortgage Basics

Borrower

The person or entity that owes the mortgage debt and signs the loan documents.

Mortgage Basics

Borrower contribution ratio

The borrower’s invested cash or accepted equity relative to project or purchase cost. Commercial and construction lenders use it to assess capital at risk.

Regulation and Compliance

Borrower disclosure

Ontario-specific. Information a mortgage brokerage must provide concerning its role, relationships, compensation, conflicts, material risks, and the cost of borrowing, as applicable.

Closing and Funding

Borrowing base

A lender-calculated amount supported by eligible receivables, inventory or other business assets after advance rates and exclusions. It commonly limits operating-line availability.

Legal and Title

Boundary encroachment

A building, fence or improvement extending across a legal boundary. It can affect title, insurance, value and lender security.

Refinancing and Debt Consolidation

Break-even period

The time required for projected savings or benefits to recover upfront costs. In refinancing, it should be compared with the expected holding period and balance differences.

Closing and Funding

Bridge loan / bridge financing

Short-term financing used to cover a timing gap, commonly where a homeowner purchases a new property before receiving the sale proceeds from the existing property.

Regulation and Compliance

Brokerage fee

A fee payable to a mortgage brokerage for arranging or attempting to arrange financing. In Ontario, the amount, timing, and circumstances must be properly disclosed.

Construction Financing

Builder mortgage approval

A mortgage approval obtained for a pre-construction purchase. Because completion may be months or years away, the approval may expire and the borrower may need to requalify.

Construction Financing

Builder’s risk insurance

Insurance covering specified construction-stage property risks. Ordinary homeowner insurance is not a substitute during major construction.

Mortgage Qualification

Building condition assessment

An engineering review of major building systems, expected repairs and capital needs. Lenders use it to test reserves and deferred maintenance.

Commercial Mortgages

Business continuity

Evidence that a business can continue producing income despite owner absence, customer loss, market changes or succession events. It matters in owner-managed and commercial files.

Commercial Mortgages

Business debt-service coverage

Normalized business cash flow divided by scheduled business debt payments. The numerator and required ratio are lender-specific.

Rates and Payments

Business email compromise

Fraud in which an email account or identity is used to redirect payments or obtain confidential information. Independent verification of changed instructions is essential.

Business Financing

Business gross revenue

Total sales or fees before expenses. It is not equivalent to personal qualifying income.

Income and Employment

Business income normalization

Adjusting financial statements to remove non-recurring items, related-party distortions and unsupported expenses or add-backs. It is central to commercial and self-employed underwriting.

Business Financing

Business liquidity

Cash and near-cash resources available to meet short-term obligations, working-capital needs and unexpected expenses.

Closing and Funding

Business reasonability

A lender’s assessment of whether claimed income makes sense for the borrower’s occupation, business size, deposits, expenses, location and industry.

Default and Enforcement

Business-for-self

An underwriting classification for a borrower earning income through sole proprietorship, partnership or corporation rather than ordinary salaried employment.

Construction Financing

Buydown

A payment made to reduce a borrower’s mortgage rate or payment for a period. It may be funded by a builder, seller, lender, or borrower, subject to lender rules.

Mortgage Insurance

Canada Mortgage and Housing Corporation (CMHC)

Also: CMHC

A federal Crown corporation that, among other functions, provides mortgage loan insurance and housing research. CMHC insurance protects the lender, not the borrower.

Commercial Mortgages

Capital expenditure reserve

An allowance for future replacement of roofs, mechanical systems and other long-lived components. It can reduce stabilized cash flow.

Private Mortgages

Capital stack

The combination and priority of equity, first mortgage, mezzanine debt, secondary financing and other capital funding a project.

Commercial Mortgages

Capitalized earnings

An income-based valuation method that converts sustainable business earnings into an indicated value using an appropriate capitalization multiple or rate.

Commercial Mortgages

Cash available for debt service (CFADS)

Also: CFADS

Normalized cash remaining to pay principal and interest after the expenses and adjustments specified by the lender. It is used in business and project finance.

Rates and Payments

Cash-back mortgage

A mortgage that provides a cash incentive at funding, commonly subject to repayment or clawback if the mortgage is discharged early. The incentive should be compared with rate and penalty terms.

Mortgage Basics

Cash-flow mortgage analysis

An assessment of actual income and expenses rather than only gross-income ratios. It helps test suitability even when formal lender ratios are met.

Legal and Title

Certificate of appointment of estate trustee

An Ontario court document commonly called probate that confirms authority to administer an estate. It may be required to sell or mortgage estate property.

Legal and Title

Chain of title

The sequence of ownership and registered instruments affecting land over time. It helps identify defects, transfers and prior interests.

Construction Financing

Change order

A documented amendment to construction scope, price or timing. Accumulated change orders can consume contingency and delay draws.

Legal and Title

Charge / mortgage charge

Ontario-specific. The land-registration instrument used to register mortgage security against title. Ontario land records commonly use the word “charge” where everyday language uses “mortgage.”

Legal and Title

Charge amount

The amount registered in the land system for a mortgage charge. It may equal or exceed the initial advance, particularly with collateral charges.

Rates and Payments

Charge terms

The contractual mortgage provisions incorporated into or registered with an Ontario charge. They govern payment, default, enforcement and borrower covenants.

Legal and Title

Chargee

Ontario-specific. The lender or holder of a registered charge.

Legal and Title

Chargor

Ontario-specific. The owner who grants a registered charge over the property.

Business Financing

Chattel mortgage

Security over movable personal property rather than land. For business financing, similar security is often perfected under Ontario’s Personal Property Security Act.

Legal and Title

Client identification method

A permitted process for verifying identity, such as government photo ID, credit file or dual-process method under applicable FINTRAC guidance.

Rates and Payments

Closed mortgage

A mortgage that limits prepayments or imposes a penalty for repayment before maturity, except for any prepayment privileges stated in the contract.

Rates and Payments

Closed variable mortgage

A variable-rate mortgage with contractual limits or penalties on prepayment. Variable pricing does not make a mortgage open.

Closing and Funding

Closing

The date on which purchase funds and legal documents are exchanged, title is transferred, and the mortgage is advanced and registered.

Closing and Funding

Closing costs

Expenses payable in addition to the down payment, such as legal fees, land transfer tax, title insurance, adjustments, appraisal costs, and registration fees.

Default and Enforcement

Co-ownership agreement

A contract among property owners addressing contributions, expenses, occupancy, decisions, default, buyout and sale. It does not automatically limit lender rights.

Mortgage Qualification

Co-signer

A person who becomes jointly liable for the mortgage debt, usually to strengthen income or credit qualification. A co-signer may or may not hold an ownership interest.

Legal and Title

Collateral charge

A charge that may secure more than one obligation and may be registered for an amount greater than the initial mortgage advance. Transferring it to another lender may require a discharge and new registration.

Commercial Mortgages

Commercial amortization

The repayment period used to calculate commercial mortgage payments. It may be shorter than residential amortization and is lender-specific.

Commercial Mortgages

Commercial covenant

A contractual financial or operational promise, such as maintaining DCR, insurance, net worth or reporting. Breach can trigger lender remedies.

Commercial Mortgages

Commercial mortgage

A mortgage secured by commercial, industrial, mixed-use, development, multi-residential, or other income-producing real estate.

Income and Employment

Commission income

Compensation based on sales or production. Lenders usually assess history, volatility, chargebacks, current year-to-date results and likelihood of continuance.

Mortgage Qualification

Commitment expiry

The last date on which a lender commitment can be used, subject to its conditions. A closing after expiry may require extension, repricing or reapproval.

Mortgage Qualification

Commitment letter

A lender’s written offer setting out the approved loan amount, rate, fees, term, conditions, security, expiry, and other requirements. It is not the same as funded money.

Legal and Title

Common expenses

Ontario-specific. Amounts condominium owners must contribute toward the condominium corporation’s expenses. Unpaid common expenses can lead to a condominium lien with serious priority consequences.

Commercial Mortgages

Common-area maintenance (CAM)

Also: CAM

Costs of operating and maintaining shared commercial areas, often recovered from tenants under lease terms.

Property and Appraisals

Common-law spouse

A partner who may have support or equitable claims but does not automatically receive the same Ontario matrimonial-property rights as a married spouse.

Commercial Mortgages

Comparable lease

A market lease used to support rent, incentives and terms in appraisal or underwriting. Differences in location, use and tenant improvements require adjustment.

Mortgage Qualification

Compensating factor

A documented strength that may offset another weakness within lender policy, such as strong liquidity, low LTV or long repayment history. It does not override mandatory rules.

Construction Financing

Completion guarantee

A promise by the borrower, sponsor or guarantor to complete the project and cover overruns. Its scope is contractual.

Rates and Payments

Compound interest

Interest calculated on principal plus previously accumulated interest. Canadian fixed-rate mortgage quotations are commonly based on semi-annual compounding, not in advance.

Rates and Payments

Compounding frequency

How often interest is mathematically added for rate-conversion purposes. Canadian fixed mortgage quotations commonly use nominal semi-annual compounding, not in advance.

Mortgage Qualification

Condition of financing

A clause in an Agreement of Purchase and Sale giving the buyer time to obtain satisfactory financing. Waiving it before financing is secure may expose the buyer to significant risk.

Income and Employment

Condominium corporation

Ontario-specific. The legal entity created when a condominium is registered. It manages the common elements, collects common expenses, maintains records, and can register liens for unpaid common expenses.

Legal and Title

Condominium lien

Ontario-specific. A lien a condominium corporation may register for unpaid common expenses and related amounts. It may rank ahead of a previously registered mortgage, making status-certificate review important.

Property and Appraisals

Consent to charge

A spouse’s or interested party’s legally sufficient consent to mortgage property where required. Consent is not necessarily the same as becoming a borrower.

Legal and Title

Conservation easement

A registered restriction protecting natural or heritage features. It can limit development and affect marketability.

Construction Financing

Construction contingency

Budget reserved for unexpected cost increases and scope issues. A lender may control its use and require replenishment.

Construction Financing

Construction cost consultant

A professional who reviews budget, contracts, progress and costs for lender or owner. Reports often support draw advances.

Construction Financing

Construction holdback

Ontario-specific. A statutory portion of construction payments retained under Ontario’s Construction Act to protect lien claimants.

Construction Financing

Construction interest reserve

Funds set aside to pay interest during construction before the project generates stable income. Depletion can signal delay or cost overrun.

Construction Financing

Construction lien

Ontario-specific. A claim arising from unpaid services or materials supplied to improve land. Construction liens can affect mortgage priority and prevent or delay funding.

Construction Financing

Construction mortgage

Financing advanced in stages as construction progresses. Each advance may require inspections, appraisals, permits, lien searches, and confirmation that equity has been invested.

Income and Employment

Continuity of income

The reasonable expectation that income will continue long enough to support the mortgage. Past income alone is insufficient if the source will end.

Income and Employment

Contract income

Income earned under fixed-term or service contracts. The lender may review contract length, renewal history, gaps, industry and remaining term.

Rates and Payments

Contract rate

The interest rate used to calculate the borrower’s actual mortgage interest, as distinct from the stress-test or qualifying rate.

Mortgage Basics

Conventional mortgage

A mortgage that does not require high-ratio mortgage default insurance, commonly because the borrower has at least 20% equity or down payment. Lender policies still apply.

Mortgage Renewal

Conversion option

A mortgage feature permitting a borrower to convert from one rate type or term to another under stated conditions. The new rate and penalty treatment are lender-specific.

Mortgage Basics

Convertible mortgage

A mortgage allowing conversion from one rate type or term to another under specified conditions, often from a short term to a longer fixed term.

Income and Employment

Corporate cash flow

Cash generated and retained by a corporation after operating needs, debt, taxes and distributions. Not all corporate cash is available for personal mortgage payments.

Mortgage Qualification

Corporate distribution capacity

The corporation’s sustainable ability to pay salary, dividends or other permitted distributions to the owner without weakening operations.

Income and Employment

Corporate retained earnings analysis

Review of accumulated after-tax profits, liquidity and business needs to determine whether retained funds strengthen the borrower. Retained earnings are not automatically qualifying income.

Rates and Payments

Cost of borrowing

The total borrowing cost required to be disclosed under applicable law, including interest and certain non-interest charges, often expressed through an annual percentage rate.

Rates and Payments

Cost per thousand

A shorthand payment or interest estimate for each $1,000 borrowed. It is useful for quick comparisons but should not replace a full amortization calculation.

Construction Financing

Cost-to-complete

The estimated amount required to finish the project from the current stage. Lenders compare it with undisbursed funds and remaining equity.

Mortgage Basics

Covenant running with the land

A land-related obligation or restriction capable of binding later owners when legal requirements are met. It can affect use and marketability.

Credit and Debt

Credit bureau

An organization that maintains consumer credit information used by lenders to assess repayment history and current obligations.

Credit and Debt

Credit bureau alert

A notice on a credit file concerning potential fraud, identity verification or consumer instructions. It must be reviewed rather than ignored.

Credit and Debt

Credit counselling

A service that may help a borrower manage debt through budgeting or repayment arrangements. Participation can affect lender analysis depending on account reporting and history.

Credit and Debt

Credit file depth

The number, age and variety of credit accounts in a report. A thin file can produce uncertainty even without negative history.

Credit and Debt

Credit migration

A change in a borrower’s risk profile over time as accounts age, balances change and payment conduct improves or deteriorates.

Credit and Debt

Credit recovery period

The sustained period of clean conduct after a negative event. Lenders evaluate what changed and whether recovery is durable.

Credit and Debt

Credit score

A numerical estimate of credit risk derived from a credit file. Lenders also assess the underlying history, utilization, missed payments, collections, and recent inquiries.

Credit and Debt

Credit utilization ratio

Revolving balance divided by revolving credit limit. High utilization can indicate cash-flow pressure even when payments are current.

Rates and Payments

Cumulative interest

The total interest paid or projected over a selected period. It helps compare amortizations, prepayments and refinancing choices.

Property and Appraisals

Current Value Assessment (CVA)

Also: CVA

Ontario-specific. MPAC’s assessed value used by municipalities as part of the property-tax calculation. It is not necessarily the property’s present market value or a lender’s appraised value.

Income and Employment

Current-year income

Income earned in the ongoing year, commonly supported by paystubs, interim statements or bank activity. It helps test whether historical averages remain reasonable.

Rates and Payments

Daily interest

Interest calculated for one day, often used in payout statements, bridge loans and interest adjustments. The day-count convention must be confirmed.

Refinancing and Debt Consolidation

Debt consolidation mortgage

A refinance, HELOC or secondary mortgage used to pay other debts. It can improve cash flow but converts some unsecured debt into debt secured by the home.

Credit and Debt

Debt management plan

An arrangement under which a credit-counselling organization coordinates repayment to creditors. It is distinct from a consumer proposal but can affect qualification.

Commercial Mortgages

Debt service coverage ratio (DSCR)

Also: DSCR

Commercial term. Net operating income divided by required debt payments. A higher DSCR generally indicates a stronger ability for the property to service the loan.

Commercial Mortgages

Debt yield

NOI divided by loan amount. It measures property cash return to the lender before considering interest rate or amortization.

Credit and Debt

Debt-free date

The projected date on which scheduled payments and planned prepayments reduce the mortgage balance to zero. Renewal rates can change this projection.

Income and Employment

Debt-service income

The income amount a lender uses in its ratio calculation after applying all policy adjustments, exclusions and averaging.

Income and Employment

Debt-to-income ratio

A broad measure comparing debt obligations with income. Residential lenders commonly use GDS and TDS rather than one universal debt-to-income calculation.

Income and Employment

Declared income

Income stated by the borrower on an application. It must be supportable and should not be confused with a no-document approval.

Rates and Payments

Declining-balance interest

Interest calculated on the outstanding principal, which generally decreases as principal is repaid. This differs from flat-rate calculations based on original principal.

Legal and Title

Deed

A traditional term for the instrument transferring ownership of land. Ontario electronic registration commonly uses a transfer instrument.

Default and Enforcement

Default

A failure to comply with a mortgage obligation, such as missing payments, failing to pay taxes or insurance, making unauthorized changes, providing false information, or breaching another covenant.

Default and Enforcement

Default insurance

Insurance protecting the lender if the borrower defaults. It is generally required for qualifying owner-occupied mortgages with a down payment below 20%, subject to insurer and program rules.

Rates and Payments

Deferred interest

Interest that is not paid currently and is added to the balance or becomes payable later. It can cause negative amortization or a larger maturity balance.

Credit and Debt

Deficiency

The amount still owing after enforcement proceeds are applied to the debt. Depending on the documents and law, a lender may pursue the borrower or guarantor for a deficiency.

Default and Enforcement

Delinquency trend

The pattern of late payments across accounts and time. Recent, repeated and secured-credit delinquencies generally raise greater concern.

Mortgage Basics

Demand loan

A loan repayable when the lender makes a valid demand, subject to the contract and applicable law.

Closing and Funding

Deposit

Money paid under an Agreement of Purchase and Sale as security for the buyer’s performance. It is different from the total down payment.

Default and Enforcement

Derogatory item

Negative information on a credit report, such as a collection, judgment, proposal, bankruptcy or serious delinquency.

Legal and Title

Discharge of charge

Ontario-specific. A registered instrument removing a mortgage charge from title after the secured obligations are paid or otherwise released.

Legal and Title

Discharge statement

A lender’s statement showing the amount required to pay out and discharge a mortgage on a specified date, including principal, interest, penalties, fees, and per-diem interest.

Default and Enforcement

Discharged consumer proposal

A consumer proposal in which the agreed obligations have been completed. Lender re-entry requirements remain product-specific.

Rates and Payments

Discounted rate

A mortgage rate offered below a lender’s posted rate. Penalties may still be calculated using the lender’s contract terms or posted-rate methodology.

Income and Employment

Dividend income

Income paid by a corporation or investment. Lenders distinguish recurring personal dividends from one-time distributions and from corporate earnings already counted elsewhere.

Rates and Payments

Document metadata

Electronic information showing creation, modification or source details. Inconsistencies can trigger authenticity review.

Income and Employment

Double counting income

Including the same economic income through more than one calculation, such as counting dividends personally and the underlying corporate profit again.

Property and Appraisals

Dower rights

Historical spousal property rights existing in some jurisdictions. Ontario mortgage transactions instead require analysis under current Ontario family and land law.

Closing and Funding

Down payment

The portion of the purchase price paid from the buyer’s own permitted sources rather than mortgage proceeds.

Construction Financing

Draw

A partial advance under a construction, renovation, or line-of-credit facility.

Construction Financing

Draw inspection

A site review confirming the stage and value of completed work before a lender releases a construction advance.

Construction Financing

Draw period

The period during which a borrower may access funds under a construction loan, HELOC or other staged facility. Conditions can apply to every draw.

Commercial Mortgages

Due diligence

The investigation performed before committing or funding, such as reviewing identity, income, credit, title, appraisal, taxes, insurance, leases, corporate records, environmental issues, and exit strategy.

Rates and Payments

Early payout penalty

A charge for repaying a closed mortgage before maturity. It may be based on three months’ interest, an interest-rate differential, or another contractual formula.

Legal and Title

Easement

A registered or legal right allowing someone to use part of another property for a stated purpose, such as access, drainage, or utilities.

Legal and Title

Easement in gross

An easement benefiting a person or entity rather than another parcel, such as certain utility rights. It can continue despite ownership changes.

Rates and Payments

Effective annual rate

The annualized rate after accounting for compounding within the year. It differs from a nominal quoted rate.

Rates and Payments

Effective monthly rate

The monthly rate mathematically equivalent to the quoted annual rate under its compounding convention. It is used in accurate payment calculations.

Income and Employment

Employment probation

A trial period during which employment may be less secure. Lender treatment depends on occupation, tenure, contract and overall strength.

Income and Employment

Employment verification

Independent confirmation of employer, position, tenure and compensation. It may include documents, direct contact and deposit review.

Legal and Title

Encroachment

A structure or improvement that extends onto neighbouring land or into an easement or setback area.

Legal and Title

Encumbrance

A registered or legal interest affecting title, such as a mortgage, lien, easement, restrictive covenant, or execution.

Property and Appraisals

Environmental indemnity

A promise by a borrower or guarantor to protect the lender against specified environmental losses. It can survive repayment depending on wording.

Mortgage Basics

Equity

The difference between a property’s value and the debts or claims secured against it. Realizable equity may be lower after sale costs, taxes, penalties, and enforcement expenses.

Mortgage Basics

Equity contribution

The borrower’s cash, land value or other accepted capital invested in a transaction. Lenders verify both amount and source.

Default and Enforcement

Equity of redemption

Ontario-specific. The owner’s right to redeem the mortgage by paying the amount legally required before that right is finally extinguished through enforcement.

Construction Financing

Equity takeout

Borrowing additional money against existing property equity. It is usually treated as a refinance rather than a simple transfer.

Private Mortgages

Equity-first funding

A structure requiring the borrower to invest specified equity before lender advances begin. It protects the lender from funding the entire early-stage risk.

Regulation and Compliance

Errors and omissions insurance

Ontario-specific. Professional liability coverage that Ontario mortgage brokerages and administrators must maintain in the form and minimum amounts prescribed by regulation.

Default and Enforcement

Estoppel certificate

A signed confirmation of facts that prevents the signer from later denying those facts. In commercial lending it may confirm lease terms, rent, defaults, deposits, and amendments.

Property and Appraisals

Excess land

Land beyond what is typical or necessary for the property’s current use. A lender may assign limited financing value to it.

Default and Enforcement

Execution

Ontario-specific. A writ or judgment enforcement claim that may affect a debtor’s interest in land. Lawyers commonly search executions before closing or advancing mortgage funds.

Credit and Debt

Execution creditor

A creditor holding a judgment or writ capable of enforcement against a debtor’s property. Priority and effect require lawyer review.

Private Mortgages

Exit strategy

Private-mortgage term. The credible plan for repaying a short-term mortgage, such as sale, refinance, completion of renovations, stabilization of income, or receipt of another source of funds.

Default and Enforcement

Expense recovery

Amounts reimbursed by tenants for taxes, insurance, utilities or operating costs. Underwriters test whether recovery is contractual and collectible.

Rates and Payments

Extended amortization

An amortization longer than the lender’s standard period. It lowers the scheduled payment but increases total interest and may be restricted by insurance or lender policy.

Property and Appraisals

Fair market value

The price a willing buyer and willing seller would agree to in an open and unrestricted market, neither being under compulsion and both having reasonable knowledge of relevant facts.

Rates and Payments

Farm operating line

Revolving financing used for seasonal inputs, livestock, crops and farm expenses. Repayment often depends on production cycles.

Property and Appraisals

Farm quota

A regulated production right in certain agricultural sectors. It is distinct from land and may require specialized valuation and security.

Legal and Title

Fee simple absolute

The broadest common private land interest, subject to laws, taxes, easements, covenants and registered claims.

Mortgage Qualification

Firm approval

An approval with major underwriting completed, but it may still contain conditions. The phrase is used inconsistently, so borrowers should review the written commitment rather than rely on the label.

Mortgage Basics

First mortgage

The mortgage with first priority among registered mortgages, subject to claims that can obtain statutory or super-priority status.

Closing and Funding

First-payment date

The date the first regular mortgage payment is due. It depends on the advance date, payment frequency and interest-adjustment arrangement.

Mortgage Renewal

First-time homebuyer land-transfer-tax refund

Ontario-specific; verify current rules. A provincial refund available to eligible first-time purchasers, subject to statutory conditions, occupancy requirements, deadlines, and a maximum refund.

Rates and Payments

Fixed-payment variable mortgage

A variable-rate mortgage whose scheduled payment may remain unchanged while the interest allocation varies, subject to trigger provisions and lender terms.

Rates and Payments

Fixed-rate mortgage

A mortgage whose interest rate is fixed for the stated term, although the payment and amortization consequences depend on the mortgage contract.

Rates and Payments

Floating rate

An interest rate that moves with a reference rate such as prime, a lender’s base rate, or another benchmark.

Default and Enforcement

Forbearance agreement

An agreement under which a lender temporarily refrains from enforcement if the borrower complies with specified repayment, reporting, or sale conditions.

Default and Enforcement

Foreclosure

Ontario-specific. A court process that can extinguish the borrower’s equity of redemption and transfer ownership to the lender. In Ontario, power of sale is generally more common.

Income and Employment

Foreign income

Income earned outside Canada. Lenders assess currency, taxation, transferability, verification, continuity and whether the employment survives relocation.

Credit and Debt

Fraud alert

A consumer-requested or bureau-generated warning requiring enhanced identity verification before new credit is granted.

Legal and Title

Fraud for profit

Mortgage fraud intended to extract money or value rather than merely obtain shelter. It can involve identity, title, appraisal or proceeds diversion.

Closing and Funding

Fraud for shelter

Misrepresentation intended to obtain a home for the borrower, such as falsifying income or down-payment documents. It remains mortgage fraud even where the borrower intends to make payments.

Mortgage Renewal

Fraudulent conveyance

A transfer intended or operating to defeat creditors under applicable law. It may be challenged and can undermine lender security.

Taxes and Government Programs

Freehold

Ownership of land and the buildings on it, subject to registered interests, statutes, taxes, and municipal rules.

Income and Employment

Full-time equivalent income

Income converted to an annual amount based on regular hours or workload. It may be inappropriate where hours are not guaranteed.

Rates and Payments

Fully amortizing payment

A scheduled payment calculated to repay principal and interest over the stated amortization if the rate and payment remain as assumed.

Rates and Payments

Fully open mortgage

A mortgage that can generally be repaid in full at any time without a prepayment penalty, although administrative and discharge costs may still apply.

Closing and Funding

Funding date

The date the lender advances mortgage money, which may be the closing date or an earlier/later date depending on legal arrangements.

Business Financing

General security agreement (GSA)

Also: GSA

Commercial term. Security granted over a business’s present and after-acquired personal property, commonly registered under Ontario’s Personal Property Security Act.

Closing and Funding

Gifted down payment

A down payment provided as a genuine, non-repayable gift from an acceptable donor. Lenders usually require a gift letter and evidence of the transfer.

Mortgage Qualification

Gross debt service ratio (GDS)

Also: GDS

The percentage of gross household income required for qualifying housing costs, commonly including mortgage payments, property taxes, heating, and part of condominium fees.

Commercial Mortgages

Gross lease

A commercial lease in which the landlord pays some or most operating expenses from the stated rent, subject to the lease terms.

Mortgage Basics

Gross mortgage amount

The face amount of the new mortgage before fees, payouts, prepaid interest and legal deductions. It is not the borrower’s net cash proceeds.

Default and Enforcement

Gross potential rent

Rent the property could generate at full occupancy before vacancy and collection loss. It is not the same as effective income.

Mortgage Qualification

Gross qualifying income

Income before personal tax that the lender accepts for debt-service calculations. It may differ from gross cash inflow.

Income and Employment

Gross-up

An underwriting adjustment that increases certain non-taxable income for qualification, where permitted by the lender.

Legal and Title

Guaranteed hours

Minimum work hours contractually committed by an employer. They can support income calculation where verified and likely to continue.

Legal and Title

Guaranteed minimum income

A contractually established minimum salary or draw. The lender may exclude discretionary bonuses or unproven upside.

Default and Enforcement

Guarantor

A person or entity promising to pay or perform if the borrower defaults. The scope of liability depends on the guarantee.

Construction Financing

Hard costs

Direct physical construction costs such as labour and materials. They exclude many soft costs and financing expenses.

Credit and Debt

Hard inquiry

A credit-file inquiry generated by a lender or creditor application. Numerous recent inquiries may suggest new or undisclosed borrowing.

Private Mortgages

Hard money loan

An informal term for asset-based private financing where property value, equity, security position, and exit strategy receive more weight than conventional income qualification.

Mortgage Basics

High-ratio mortgage

A residential mortgage where the loan exceeds 80% of the property’s lending value or purchase price under applicable rules, normally requiring mortgage default insurance.

Income and Employment

Hobby farm

A rural residential property with limited personal-scale agricultural use where outside income usually supports the mortgage.

Construction Financing

Holdback

Funds retained until specified conditions are met. Holdbacks may relate to construction, repairs, taxes, liens, lease-up, or unresolved property issues.

Taxes and Government Programs

Home Buyers’ Plan (HBP)

Also: HBP

A federal program allowing eligible individuals to withdraw funds from an RRSP for a qualifying home purchase, subject to current limits and repayment rules.

Credit and Debt

Home equity line of credit (HELOC)

Also: HELOC

A revolving credit facility secured by residential property. The borrower can draw, repay, and redraw up to the approved limit, subject to the agreement.

Mortgage Qualification

Home inspection

A visual review of a property’s systems and condition by an inspector. It is not an appraisal and does not determine mortgage value.

Taxes and Government Programs

HST new housing rebate

Ontario-specific component; verify current rules. Federal and Ontario rebates may return part of the HST paid on qualifying new or substantially renovated housing. Eligibility, value thresholds, occupancy, timing, and assignment rules are technical and change over time.

Mortgage Basics

Identity mismatch

A conflict among names, addresses, dates of birth, SIN information or other identifiers. It may result from error, name change or fraud and requires resolution.

Income and Employment

Income confirmation

Documents used to support income, such as employment letters, pay stubs, tax returns, Notices of Assessment, business financial statements, bank statements, and contracts.

Income and Employment

Income haircut

A percentage reduction applied to an income stream because of volatility, currency, uncertainty or policy. It creates a conservative qualifying amount.

Income and Employment

Income layering

Combining several income sources, such as salary, rent and pension, each under its own verification rule. Every layer must be independently supportable.

Income and Employment

Income property

Real estate held primarily to produce rental or business income.

Income and Employment

Income seasonality

Predictable variation in earnings during the year. Lenders may require multi-year history and current evidence to avoid annualizing a peak period.

Income and Employment

Income source concentration

Dependence on one employer, client, tenant or contract. High concentration can increase continuity risk.

Income and Employment

Income stability

The consistency and predictability of an income source over time. Stable income can still be insufficient in amount.

Income and Employment

Income sustainability

The likelihood that income remains available after considering business needs, taxes, market conditions and borrower circumstances.

Income and Employment

Income verification gap

The difference between actual earning capacity and what available documents allow a lender to accept. Alternative documentation may address the gap but not invent income.

Legal and Title

Independent legal advice (ILA)

Also: ILA

Advice from a lawyer who acts only for the person receiving the advice. Lenders commonly require ILA for guarantors, non-title spouses, equity gifts, conflicts, or higher-risk private transactions.

Default and Enforcement

Insolvency event

A bankruptcy, proposal, receivership or related event indicating inability to meet obligations under applicable law. Mortgage impact depends on timing, discharge and re-established conduct.

Legal and Title

Instrument number

The unique registration identifier assigned to a document in Ontario’s land-registration system. It allows the underlying instrument to be retrieved.

Mortgage Insurance

Insurable mortgage

A mortgage that may qualify for portfolio mortgage insurance even though the borrower has at least 20% equity. It must satisfy insurer eligibility rules.

Mortgage Insurance

Insured mortgage

A mortgage protected by mortgage default insurance, generally where the borrower has a smaller down payment and meets insurer requirements.

Rates and Payments

Interest adjustment amount

Interest charged for the period between the funding date and the start of the regular payment cycle. It may be deducted or collected separately.

Closing and Funding

Interest adjustment date

The date from which the regular payment cycle begins. Interest for the period between funding and that date may be collected separately.

Private Mortgages

Interest-only mortgage

A mortgage requiring payment of interest without scheduled principal reduction for a specified period.

Private Mortgages

Interest-only period

A period during which scheduled payments cover interest without required principal reduction. The balance remains outstanding unless voluntary principal is paid.

Rates and Payments

Interest-rate differential (IRD)

Also: IRD

A prepayment-penalty method comparing the mortgage rate with a reference or replacement rate for the remaining term, according to the lender’s formula.

Rates and Payments

Interim financial statements

Financial statements covering the period since the latest fiscal year-end. They help determine whether current performance supports historical results.

Property and Appraisals

Interim occupancy

Ontario condominium term. The period when a buyer may occupy a newly built condominium unit before title transfers. The buyer usually pays occupancy fees and normally does not yet make the final mortgage advance.

Property and Appraisals

Investment property mortgage

Financing for a property not occupied as the borrower’s principal residence, commonly underwritten using rental income, market rent, debt coverage, and larger down-payment requirements.

Credit and Debt

Joint and several liability

Liability allowing the lender to pursue any one borrower or guarantor for the full debt, leaving contribution issues to be resolved among the liable parties.

Mortgage Basics

Joint borrower liability

The contractual responsibility shared by two or more borrowers, commonly on a joint and several basis. Internal family arrangements may not restrict lender remedies.

Commercial Mortgages

Joint tenancy

Co-ownership in which an owner’s interest generally passes to the surviving joint tenant on death, subject to legal exceptions and severance.

Default and Enforcement

Judgment

A court determination that one party owes another. A judgment may support enforcement and may appear through an execution search.

Legal and Title

Know your client (KYC)

Also: KYC

Processes used to identify clients, understand relationships and assess suspicious or inconsistent activity. Legal obligations depend on the regulated sector.

Commercial Mortgages

Land registry office (LRO)

Also: LRO

Ontario-specific. The registry jurisdiction in which documents affecting a property are registered and certified. Ontario land records are accessed electronically through the provincial system.

Mortgage Renewal

Land Transfer Tax (LTT)

Also: LTT

Ontario-specific. Provincial tax generally payable when an interest in land is acquired. The amount depends on value of consideration, property type, location, exemptions, and current statutory rates.

Commercial Mortgages

Lease abstract

A summary of key lease provisions, including rent, term, options, assignments and termination rights. It supports portfolio and lender review.

Commercial Mortgages

Lease rollover

The expiry or renewal of leases during a selected period. Concentrated rollover can create vacancy, improvement and commission risk.

Mortgage Basics

Legal description

The formal description identifying land by lot, plan, concession, unit or other registered method. It is more precise than a street address.

Mortgage Basics

Lender

The person or entity advancing mortgage funds and receiving the mortgage security.

Mortgage Basics

Lender fee

A fee charged by a lender, common in alternative, private, commercial, and construction financing. It is separate from interest and any brokerage fee.

Property and Appraisals

Lending value

The property value accepted by the lender for calculating the loan. It may be the lower of purchase price and appraised value or another amount under lender or insurer rules.

Default and Enforcement

Letter of direction

Written instructions authorizing a lawyer, brokerage, lender, or other party to pay funds to specified recipients.

Legal and Title

Lien

A legal claim or security interest against property for an unpaid obligation. Examples include construction liens, condominium liens, tax liens, and judgment-related claims.

Construction Financing

Lien holdback

The amount retained under construction law or lender policy to address potential lien claims. Ontario’s statutory basic holdback is generally 10% in applicable contracts.

Property and Appraisals

Life estate

An interest allowing a person to use property for life, after which another person’s interest takes effect. Mortgageability requires specialized legal review.

Income and Employment

Line 15000 income

Total income reported on a Canadian T1 return. It includes several sources and is not always the lender’s final qualifying figure.

Default and Enforcement

Loan constant

Annual debt service divided by the original loan amount. Commercial underwriters use it to convert debt-service capacity into indicative loan size.

Mortgage Renewal

Loan maturity

The date the unpaid mortgage becomes due under the term. Maturity is especially important in private, bridge and balloon-payment loans.

Construction Financing

Loan-to-cost ratio (LTC)

Also: LTC

Construction/commercial term. The loan amount divided by the total eligible cost of acquiring, constructing, or improving the project.

Mortgage Qualification

Loan-to-value ratio (LTV)

Also: LTV

The mortgage amount divided by the lender-accepted property value, expressed as a percentage. Combined LTV includes all mortgages or secured facilities that the lender counts.

Rates and Payments

Lock-in / rate hold

A lender’s agreement to hold a rate for a stated period, subject to conditions, product rules, and closing within the hold period.

Rates and Payments

Lump-sum prepayment

An extra principal payment permitted under a mortgage’s prepayment privileges.

Income and Employment

Management add-back

An adjustment to owner compensation or management expense in a business or property analysis. The lender may replace actual cost with a market allowance.

Real Estate Investment

Market rent

The rent a property could reasonably command in the open market. It may differ from the rent actually being paid.

Mortgage Qualification

Marketability

How readily a property can be sold at a reasonably predictable price. Lenders consider location, condition, uniqueness, demand, zoning, access, and environmental concerns.

Income and Employment

Maternity or parental leave income

Income received during a temporary leave. The lender may assess benefit amount, employer top-up, return date and post-leave salary.

Legal and Title

Matrimonial home

Ontario-specific. A family residence ordinarily occupied by spouses at separation and designated by Ontario’s Family Law Act. Special possession and disposition rules can apply even where only one spouse is on title.

Legal and Title

Matrimonial-home designation

A registration available under Ontario family law that may protect a spouse’s interest or notify third parties. Legal advice is required to assess its effect.

Mortgage Renewal

Maturity date

The date the mortgage term ends and the remaining balance becomes due unless renewed, refinanced, or otherwise repaid.

Credit and Debt

Mezzanine financing

Subordinate financing positioned between senior mortgage debt and equity, often secured through shares or other rights. It carries higher risk and cost.

Private Mortgages

MIC / Mortgage Investment Corporation

A corporation structured under the federal Income Tax Act to invest primarily in mortgages and distribute income under prescribed rules. A MIC is not itself a guarantee of investment quality.

Commercial Mortgages

Mixed-use property

A property containing more than one use, such as residential units above retail or office space. Financing may be treated as residential, commercial, or hybrid depending on the property and lender.

Mortgage Basics

Mortgage

A loan secured by an interest in real property. In Ontario title registration, the security instrument is commonly called a charge.

Regulation and Compliance

Mortgage agent level 1

Ontario-specific. An individual licensed by FSRA to deal in mortgages through one licensed brokerage within the permitted scope of a Level 1 licence.

Regulation and Compliance

Mortgage agent level 2

Ontario-specific. An individual licensed by FSRA with the education and authority to deal in mortgages including private mortgages, through one licensed brokerage.

Mortgage Basics

Mortgage allocation

The division of a mortgage payment between interest, principal, taxes or other components. The interest-principal split changes over time.

Mortgage Basics

Mortgage balance projection

An estimate of outstanding principal at a future date based on rate, payments and prepayments. It is central to renewal and refinance comparisons.

Regulation and Compliance

Mortgage broker

Ontario-specific. An individual licensed by FSRA who may deal in mortgages for a licensed brokerage and supervise mortgage agents, subject to the Act and regulations.

Regulation and Compliance

Mortgage broker of record / principal broker

Ontario-specific. The licensed mortgage broker designated by a brokerage to oversee compliance and supervision. Ontario law uses the term principal broker.

Regulation and Compliance

Mortgage brokerage

Ontario-specific. A business licensed by FSRA to carry on mortgage brokering activities in Ontario.

Default and Enforcement

Mortgage default insurance premium

The premium paid to insure a mortgage against borrower default. It is usually added to the mortgage balance, although provincial sales tax on the premium, where applicable, may need to be paid separately.

Mortgage Basics

Mortgage delinquency

Failure to make a mortgage payment as required. Lenders generally treat recent secured-credit delinquency as a significant risk signal.

Mortgage Basics

Mortgage fraud

Intentional misrepresentation or concealment in a mortgage transaction, including false income, employment, occupancy, down payment, debt, identity, value, or transaction information.

Mortgage Basics

Mortgage instructions

The lender’s directions to the closing lawyer setting out the documents, searches, insurance, title, priority, and funding conditions required.

Mortgage Renewal

Mortgage portability gap

The difference between an existing portable mortgage and the financing needed for a replacement property. It may be filled through a blend, increase or separate loan.

Mortgage Basics

Mortgage statement

A periodic or annual statement showing information such as payments, interest, principal, balance, and other account activity.

Mortgage Qualification

Mortgage stress test

Verify current rules. Qualification at a rate higher than the contract rate to test repayment capacity. The applicable formula depends on the lender, insurance status, transaction type, and current federal or lender rules.

Mortgage Basics

Mortgagee

The lender or holder of the mortgage security.

Mortgage Basics

Mortgagor

The borrower or owner who grants the mortgage security.

Mortgage Renewal

Municipal Land Transfer Tax (MLTT)

Also: MLTT

Toronto-specific; verify current rates. A City of Toronto land-transfer tax payable in addition to Ontario LTT on applicable Toronto transactions.

Taxes and Government Programs

Municipal Non-Resident Speculation Tax (MNRST)

Also: MNRST

Toronto-specific; verify current rules. An additional Toronto tax applicable to certain foreign purchasers of residential property, separate from provincial NRST and MLTT.

Default and Enforcement

Municipal tax arrears certificate

A document or search confirming property-tax status. Unpaid municipal taxes can create serious priority and enforcement issues for lenders.

Closing and Funding

Net advance

The amount actually available after required payouts, fees, prepaid interest, holdbacks and legal deductions are taken from the gross mortgage.

Income and Employment

Net income after tax (NIAT)

Also: NIAT

Corporate net income after income tax. Some named-lender self-employed programs analyze an owner’s share of NIAT, subject to liquidity, ownership and double-counting controls.

Commercial Mortgages

Net operating income (NOI)

Also: NOI

Commercial term. Property income remaining after operating expenses but before mortgage payments, income tax, depreciation, and often capital expenditures.

Mortgage Qualification

Net qualifying income

A lender-specific term that may refer to accepted income after deductions or adjustments. It should not be assumed to mean take-home pay.

Construction Financing

Net worth

Assets minus liabilities. Lenders may use net worth to assess financial resilience, guarantees, and the borrower’s ability to cover cost overruns or vacancies.

Rates and Payments

Nominal annual rate

A quoted annual rate expressed with a stated compounding frequency. It is not necessarily the effective annual rate.

Legal and Title

Nominee owner

A registered owner holding title for another beneficial owner. The arrangement must be disclosed and documented for lender, tax and legal purposes.

Property and Appraisals

Non-arm’s-length transaction

A transaction between related or connected parties who may not be negotiating independently. Lenders often require additional valuation and documentation.

Mortgage Basics

Non-conforming mortgage

A mortgage that falls outside standard prime guidelines because of credit, income, property, loan purpose, or documentation.

Mortgage Basics

Non-recourse loan

A loan limiting lender recovery primarily to specified collateral, subject to carve-outs and documents. Full non-recourse lending is uncommon in many smaller transactions.

Mortgage Basics

Non-recurring expense

An unusual expense not expected to repeat. A lender may add it back only where the evidence and business context support that treatment.

Taxes and Government Programs

Non-Resident Speculation Tax (NRST)

Also: NRST

Ontario-specific; verify current rules. A provincial tax on certain acquisitions of residential property by foreign entities or taxable trustees, subject to exemptions and rebates.

Credit and Debt

Non-responsibility notice

A credit-bureau notation disputing responsibility for a joint or fraudulent account. It does not automatically determine legal liability.

Income and Employment

Non-taxable income gross-up

Increasing eligible non-taxable income for ratio purposes to compare it with taxable gross income. The percentage and eligible sources vary by lender.

Income and Employment

Notice of Assessment (NOA)

Also: NOA

A CRA document summarizing a tax return assessment. Lenders use it to support income and confirm tax balances.

Default and Enforcement

Notice of sale

Ontario-specific. A formal notice served in a power-of-sale process after default, giving entitled parties the statutory or contractual redemption period before sale.

Rates and Payments

Notice of security interest (NOSI)

Also: NOSI

Ontario-specific. A registration historically used to give notice of certain financed fixtures or equipment interests on title. Ontario reforms have restricted or eliminated many consumer NOSI practices; current title treatment should be confirmed by a lawyer.

Property and Appraisals

Occupancy permit

Municipal authorization permitting occupancy when legal requirements are met. It can be a condition for final draw or permanent takeout.

Mortgage Basics

Occupational continuity

The borrower’s sustained participation in the same profession or industry, even where the employer or business changed. It can support a shorter current-job history.

Rates and Payments

Open mortgage

A mortgage that permits full or partial repayment without a contractual prepayment penalty, subject to its terms.

Income and Employment

Operating expense ratio

Operating expenses divided by effective gross income. It helps compare property efficiency but must use consistent expense definitions.

Property and Appraisals

Operating line secured by real estate

A revolving business facility supported by a mortgage or collateral charge over real property.

Income and Employment

Owner compensation

Salary, dividends, bonuses, shareholder benefits and other amounts received from an owner-managed business. Lenders evaluate the complete pattern.

Construction Financing

Owner-builder

A person who constructs or substantially renovates a home for personal use. Mortgage draws, permits, lien holdbacks, warranties, and HST rebates may require specialized review.

Mortgage Qualification

Owner-manager

A person who controls and works in a business. Their personal income may depend on both compensation and the corporation’s financial capacity.

Property and Appraisals

Owner-occupied property

A property used as the borrower’s principal or secondary residence rather than held solely as a rental.

Default and Enforcement

Paid collection

A collection account reported as satisfied. Payment improves the status but the underlying history may remain relevant.

Legal and Title

Parcel register

Ontario-specific. The official electronic title record showing ownership, legal description, registered instruments, and certain qualifications or notices affecting a property.

Legal and Title

Parcel register abstract

A copy or extract of the Ontario parcel register showing ownership and registered instruments. It is central to title review.

Income and Employment

Part-time income

Income from employment with fewer or variable hours. History, guaranteed hours and current trend determine whether it is usable.

Legal and Title

Partial discharge

A registered release of a mortgage from one property or part of a property while the mortgage remains in effect against other secured land.

Rates and Payments

Payment frequency

How often mortgage payments are made, such as monthly, semi-monthly, biweekly, accelerated biweekly, weekly, or accelerated weekly.

Rates and Payments

Payment shock

A material increase in required payment after renewal, rate change, trigger event or end of an interest-only period. Stress testing should measure this risk.

Rates and Payments

Payment stream

The sequence, amount and timing of expected payments under a mortgage. Valuation and amortization depend on the stream.

Income and Employment

Pension income

Regular retirement income paid by government, employer or annuity arrangement. Lenders assess amount, taxation, survivor terms and continuity.

Rates and Payments

Per diem interest

The daily interest amount used to calculate interest between dates, including on a payout statement.

Commercial Mortgages

Percentage rent

Commercial rent based partly on tenant sales. The lender may discount it if volatile or insufficiently documented.

Legal and Title

Permitted client

Ontario regulatory term. A defined category of sophisticated or institutional client for whom certain mortgage-brokering exemptions or modified requirements may apply.

Credit and Debt

Personal covenant

The borrower’s personal promise to repay the debt, separate from the lender’s rights against the mortgaged property.

Business Financing

Personal guarantee

A promise by an individual to pay a debt owed by another borrower, commonly a corporation.

Property and Appraisals

Personal Property Security Act (PPSA)

Also: PPSA

Ontario-specific. Ontario legislation governing many security interests in personal property. Mortgage transactions involving businesses, equipment, rents, or fixtures may require PPSA searches and registrations.

Property and Appraisals

PIN / Property Identifier Number

Ontario-specific. The unique number assigned to a parcel in Ontario’s electronic land-registration system.

Default and Enforcement

PITH

An underwriting acronym for principal, interest, property taxes, and heating costs.

Rates and Payments

Politically exposed person (PEP)

Also: PEP

A person holding or connected to specified prominent public functions under anti-money-laundering law. Additional determinations and measures may apply.

Mortgage Renewal

Portability

A mortgage feature allowing a borrower to transfer the existing mortgage terms to a new property, subject to approval, timing, and lender conditions.

Legal and Title

Possessory title

Title claimed through possession rather than a conventional registered transfer. Ontario land-law treatment is technical and lender acceptance is limited.

Rates and Payments

Posted rate

A lender’s publicly stated rate before discretionary discounts. It may also be used in certain prepayment-penalty calculations.

Mortgage Qualification

Power of attorney

A legal document authorizing one person to act for another. Mortgage lenders and lawyers scrutinize powers of attorney because of fraud, capacity, and authority risks.

Default and Enforcement

Power of sale

Ontario-specific. A mortgage-enforcement remedy allowing a lender to sell the property after default and required notice without first becoming the owner. The lender must account for sale proceeds according to law.

Mortgage Qualification

Pre-approval

A preliminary assessment of borrowing capacity, often with a rate hold. It is not a guarantee because the property, documents, and borrower circumstances must still satisfy underwriting.

Rates and Payments

Prepayment charge

A fee payable for repaying more principal than the mortgage allows before maturity.

Rates and Payments

Prepayment privilege

The contractual right to make extra payments, increase regular payments, or pay a lump sum without penalty within stated limits.

Rates and Payments

Prime lender

A bank, credit union, trust company, or monoline lender offering standard pricing to borrowers and properties meeting its conventional guidelines.

Rates and Payments

Prime rate

A reference rate set by each financial institution and commonly used to price variable mortgages and lines of credit.

Mortgage Basics

Principal

The amount borrowed or the unpaid loan balance, excluding future interest.

Mortgage Basics

Principal broker

Ontario-specific. The licensed mortgage broker appointed by a mortgage brokerage to oversee compliance, supervision, policies, and statutory responsibilities.

Mortgage Basics

Principal curtailment

An extra principal payment that reduces the balance outside the regular amortization schedule. Prepayment privileges and restrictions apply.

Legal and Title

Prior encumbrance

A mortgage, lien, easement, or other interest ranking ahead of another security interest.

Legal and Title

Priority

The legal order in which claims against property are paid or enforced. Registration order is important, but statutes can alter normal priority.

Closing and Funding

Priority agreement

An agreement changing the order in which creditors rank against collateral. It may be registered or delivered as a closing condition.

Private Mortgages

Private lender

An individual, corporation, trust, MIC, or mortgage fund lending outside conventional institutional channels, often emphasizing equity, property quality, risk, and exit strategy.

Private Mortgages

Private mortgage

A mortgage funded by a private lender, usually for a shorter term and at a higher total cost than prime financing because it addresses risk, speed, complexity, or temporary qualification issues.

Mortgage Basics

Private road agreement

An agreement governing access, maintenance and cost sharing for a non-municipal road. Lenders assess legal and year-round access.

Mortgage Basics

Probate

The court process confirming estate authority and, where applicable, the will. It does not itself eliminate mortgages or other secured claims.

Income and Employment

Professional corporation

A corporation through which a regulated professional carries on practice. Mortgage analysis may include salary, dividends, corporate statements and professional-program policy.

Closing and Funding

Progress advance

A construction or renovation advance released after specified work is completed and verified.

Income and Employment

Projected income

Future income accepted under a narrow lender policy, often for specified professionals or executed contracts. It is not a general substitute for current income.

Commercial Mortgages

Property stabilization

The point at which occupancy, income and expenses demonstrate sustainable operations. Stabilization supports permanent loan sizing.

Property and Appraisals

Property tax adjustment

A closing calculation allocating property taxes between buyer and seller based on the closing date and amounts paid.

Default and Enforcement

Public record item

Credit information arising from courts or insolvency records, such as judgments, bankruptcies or proposals.

Mortgage Basics

Purchase-money mortgage

A mortgage given to finance the purchase of the same property, including a vendor take-back mortgage.

Mortgage Qualification

Qualifying rate

The interest rate used to test whether a borrower can afford the mortgage. It may be higher than the actual contract rate.

Construction Financing

Quantity surveyor

A construction-cost professional who estimates and monitors project costs. In Canada, lenders may use cost consultants with varying professional backgrounds.

Commercial Mortgages

Quiet enjoyment

A property-law and lease concept protecting lawful possession from substantial interference, subject to the agreement and law.

Commercial Mortgages

Quitclaim

A transfer or release of whatever interest a person may have without promising that the interest is valid. Specialized legal advice is required where used in mortgage enforcement or title resolution.

Rates and Payments

Rate buydown contribution

Money paid by a builder, seller, lender or borrower to reduce the mortgage rate or payment under a permitted structure. It must be disclosed and accepted by the lender.

Rates and Payments

Rate hold

A lender’s temporary reservation of a mortgage rate for a qualifying application, subject to expiry and conditions.

Rates and Payments

Rate reset date

The date on which a variable, adjustable or reset mortgage rate is recalculated. The payment may or may not change at the same time.

Rates and Payments

Re-amortization

Recalculating payments over a revised remaining amortization, often at renewal or after a material balance change. Extending amortization reduces payment but increases long-term interest.

Credit and Debt

Re-established credit

New credit accounts maintained satisfactorily after a prior insolvency or major delinquency. The required number, type and history vary by lender.

Income and Employment

Reasonable income

An alternative-lender concept asking whether stated earnings are plausible for the business and supported by independent evidence. It remains verified underwriting.

Default and Enforcement

Receiver / receiver-manager

Commercial/enforcement term. A person appointed privately or by court to take control of secured assets, collect income, operate or sell property, and apply proceeds under the appointment and law.

Mortgage Basics

Recourse loan

A loan permitting the lender to pursue the borrower or guarantor beyond the collateral, subject to the documents and law.

Mortgage Basics

Red flag

A fact or inconsistency suggesting additional verification is required. A red flag is not proof of fraud.

Default and Enforcement

Redemption

Payment of the amount required to cure or fully repay the mortgage and stop enforcement before the borrower’s redemption rights expire.

Refinancing and Debt Consolidation

Refinance

Replacing or increasing existing financing, usually to obtain funds, consolidate debt, change terms, or move to another lender.

Closing and Funding

Registered amount

The amount stated in the registered charge. It may equal, exceed, or in some collateral-charge structures differ from the amount initially advanced.

Legal and Title

Registered owner

The person or entity shown on the parcel register as holding legal title. Beneficial ownership may differ.

Legal and Title

Registration

Recording an instrument in the land-registration system so it affects title and gives notice and priority according to law.

Commercial Mortgages

Reliance letter

A document allowing a lender or other party to rely on a professional report such as an environmental assessment. It is commonly required in commercial lending.

Rates and Payments

Remaining amortization

The time left to repay the mortgage on the current schedule. It can differ from the original amortization because of prepayments, payment changes or negative amortization.

Mortgage Renewal

Renewal

A new mortgage term offered when the existing term matures. Renewal is not automatic unless the lender agrees.

Mortgage Renewal

Renewal offer

The lender’s proposed rate, term, payment and conditions for the next mortgage term. It should be compared with the borrower’s current needs, not accepted automatically.

Commercial Mortgages

Rent concession

Free rent, reduced rent or another incentive granted to a tenant. Contract face rent should be adjusted for concessions when analyzing economics.

Default and Enforcement

Rent step-up

A scheduled increase in rent during the lease term. Underwriters consider timing, tenant affordability and whether future rent is supportable.

Income and Employment

Rental income continuity

The expectation that rent can continue based on leases, legality, market demand, property condition and vacancy.

Real Estate Investment

Rental offset

A lender method that subtracts an accepted portion of rental income from property expenses instead of adding the income to gross income.

Commercial Mortgages

Replacement reserve

Commercial term. Funds set aside for major future repairs and capital replacements.

Mortgage Basics

Reset mortgage

A mortgage whose rate and sometimes payment reset at predetermined intervals. The exact benchmark and adjustment formula are contractual.

Legal and Title

Restriction on title

A registered limitation preventing or conditioning certain dealings with land. It can delay or prevent mortgage registration.

Construction Financing

Retainage

Another term for money withheld from contractor payments, often connected to lien holdbacks or completion deficiencies.

Income and Employment

Return-to-work income

Employment income expected after a temporary leave. The lender may require employer confirmation, return date and evidence that the position remains available.

Mortgage Basics

Reverse mortgage

A loan generally available to older homeowners that releases home equity without required regular principal-and-interest payments, with repayment typically due on sale, move-out, or death, subject to the contract.

Credit and Debt

Revolving utilization

The proportion of available revolving credit currently used. It can change quickly and should be reviewed close to application.

Commercial Mortgages

Right of survivorship

The feature of joint tenancy under which a deceased joint tenant’s interest generally passes to the survivor, subject to severance and legal exceptions.

Legal and Title

Right of way

An easement allowing passage over land.

Mortgage Basics

Rollover mortgage

An informal description of a mortgage renewed or extended, sometimes automatically or for a short period, after maturity.

Income and Employment

Salary income

Fixed employment compensation paid regularly. The lender still verifies tenure, status, probation and current deposits.

Property and Appraisals

Sale of property clause

A mortgage provision addressing repayment when the property is sold, often making the full balance due unless the mortgage is portable or assumable.

Mortgage Basics

Second mortgage

A mortgage ranking behind a first mortgage. Its higher risk generally produces higher rates, fees, and stronger equity requirements.

Mortgage Basics

Secondary financing

Financing placed behind a first mortgage, such as a second or third mortgage.

Credit and Debt

Secured-credit history

Payment conduct on mortgages, auto loans and other collateral-backed obligations. Defaults can indicate both capacity and collateral-enforcement risk.

Closing and Funding

Semi-annual compounding, not in advance

The conventional Canadian method used to quote many fixed mortgage rates: interest is compounded twice per year, with interest not charged before it is earned.

Mortgage Qualification

Septic capacity

The approved or practical wastewater capacity of a private septic system. It can limit occupancy, additions and legal use.

Income and Employment

Serviceability

The borrower’s or property’s ability to make required debt payments from reliable income or cash flow.

Mortgage Basics

Severance of joint tenancy

An act converting joint tenancy into tenancy in common. It changes survivorship and estate consequences.

Income and Employment

Shareholder loan

An amount owed between a corporation and a shareholder. Its direction, repayment terms and tax treatment can materially affect net worth and cash flow.

Default and Enforcement

Sheriff’s execution search

Ontario-specific. A search for writs of seizure and sale filed against a person or entity that may affect dealings with land.

Refinancing and Debt Consolidation

Simple break-even

Upfront costs divided by monthly savings. It is a quick refinance measure but ignores balance, tax and time-value differences.

Rates and Payments

Simple interest

Interest calculated only on principal, not on accumulated interest, unless unpaid interest is lawfully capitalized.

Commercial Mortgages

Single-tenant risk

Dependence on one tenant for most or all property income. Lease quality and re-leasing cost become central to underwriting.

Property and Appraisals

Small rental property

A one-to-four-unit residential rental property in many lending programs. Rules differ by lender, insurer, occupancy, and number of units.

Construction Financing

Soft costs

Project expenses other than direct construction, such as design, permits, financing, legal, marketing and development charges.

Credit and Debt

Soft inquiry

A credit-file access that generally does not affect the consumer score, such as the consumer reviewing their own report.

Income and Employment

Source of wealth

The broader origin of a person’s accumulated assets, such as business ownership, employment or inheritance. It differs from source of funds for one transaction.

Commercial Mortgages

Spousal consent

Ontario-specific. Consent or release that may be required where a property is a matrimonial home, even if the spouse is not a registered owner.

Commercial Mortgages

Spousal release

A family-law or conveyancing document releasing specified rights. Its effectiveness and scope require legal advice.

Commercial Mortgages

Stabilized occupancy

The sustainable occupancy level used for underwriting rather than a temporary full or low occupancy snapshot.

Rates and Payments

Standard charge terms

Ontario-specific. A set of mortgage terms filed in the land-registration system and incorporated into a registered charge by reference.

Closing and Funding

Statement of adjustments

A closing document calculating the balance due after adjusting for deposits, taxes, rents, condominium fees, fuel, and other items.

Property and Appraisals

Status certificate

Ontario-specific. A condominium corporation document containing prescribed information about the corporation and unit, including common expenses, reserve fund, insurance, legal proceedings, and liens or arrears.

Mortgage Renewal

Straight switch

A transfer of an existing mortgage to another lender without increasing the balance or amortization, subject to the receiving lender’s and applicable regulatory rules.

Mortgage Qualification

Stress test

See mortgage stress test.

Credit and Debt

Subordination agreement

An agreement by which one creditor postpones its priority to another creditor.

Construction Financing

Substantial performance

A defined Ontario Construction Act concept affecting lien and holdback procedures. It is a legal test, not merely near-completion in ordinary language.

Income and Employment

Support income

Child or spousal support received under an agreement or order. Lenders assess documentation, receipt history and expected duration.

Credit and Debt

Support obligation

Child or spousal support payable by a borrower. It is generally included in debt-service analysis under lender policy.

Legal and Title

Survey

A plan prepared by a surveyor showing boundaries, buildings, easements, and encroachments. Title insurance has reduced but not eliminated the need for surveys.

Mortgage Basics

Suspicious transaction report (STR)

Also: STR

A report submitted to FINTRAC when legal grounds and sector obligations are met. Reporting entities must not disclose filing in a prohibited manner.

Private Mortgages

Syndicated mortgage

A mortgage funded by two or more lenders or investors. Ontario securities and mortgage-brokering rules may apply differently depending on whether the investment is qualified or non-qualified.

Credit and Debt

Synthetic identity

An identity assembled from real and fabricated information. It can be used to build credit before fraudulent borrowing.

Construction Financing

Takeout financing

Permanent or longer-term financing intended to repay construction, bridge or private debt after completion or stabilization.

Default and Enforcement

Tax arrears

Unpaid property taxes. Municipal tax claims can have priority consequences and may lead to tax-sale proceedings.

Income and Employment

Taxable income

Income remaining for tax purposes after permitted deductions. It is not always identical to cash flow or mortgage qualifying income.

Income and Employment

Temporary income

Income expected to end within a defined period, such as a short contract or benefit. It may be excluded or limited despite current receipt.

Rates and Payments

Tenancy in common

Co-ownership where each owner holds a separate share that can generally pass through the owner’s estate rather than automatically to the other owners.

Commercial Mortgages

Tenant concentration

The percentage of property income generated by major tenants. High concentration can increase default and rollover risk.

Commercial Mortgages

Tenant improvement allowance

Landlord funds provided for a tenant’s buildout. It is a leasing cost that may reduce effective cash flow and require reserves.

Commercial Mortgages

Tenure

The legal form under which property is held, such as freehold, leasehold or condominium. Lenders assess duration, transferability and enforcement rights.

Rates and Payments

Term

The period for which the mortgage contract, rate, and conditions are in force. At the end of the term, the unpaid balance must be renewed, refinanced, or repaid.

Rates and Payments

Term-to-amortization ratio

A comparison of the current mortgage term with the full repayment period. A short term creates more frequent renewal risk even when amortization is long.

Rates and Payments

Third-party determination

A compliance assessment of whether a transaction is conducted on behalf of another person or entity. Mortgage-sector FINTRAC rules can require it.

Legal and Title

Title

The legal ownership record for land and the interests registered against it.

Legal and Title

Title impersonation

Fraud in which a person pretends to be the registered owner or authorized representative to transfer or mortgage property.

Legal and Title

Title insurance

Insurance covering specified title and transaction risks, such as certain defects, fraud, survey issues, and registration problems. Coverage and exclusions depend on the policy.

Legal and Title

Title qualification

A notation describing limitations or conversion status under the Land Titles system. A lawyer interprets its effect on marketable title.

Legal and Title

Title search

A lawyer’s review of the parcel register, instruments, ownership, mortgages, liens, easements, restrictions, and other title matters.

Taxes and Government Programs

Toronto Vacant Home Tax

Toronto-specific; verify current rules. A municipal tax on residential properties declared or deemed vacant, subject to exemptions and annual declaration requirements. Outstanding amounts can complicate a sale or refinance.

Regulation and Compliance

Total cost of borrowing

Interest and applicable fees or charges over the relevant period, determined under disclosure rules and assumptions.

Mortgage Qualification

Total debt service ratio (TDS)

Also: TDS

The percentage of gross household income required to cover qualifying housing costs plus other required debt payments.

Rates and Payments

Total interest over amortization

Projected interest paid if assumptions remain unchanged for the full amortization. Because most mortgages renew several times, it is a scenario rather than a promise.

Credit and Debt

Trade line

An individual credit account reported to a bureau. Its age, limit, balance and payment history contribute to credit analysis.

Legal and Title

Transaction monitoring

Ongoing review of activity for patterns inconsistent with the client, purpose or expected conduct. Requirements depend on entity and risk.

Mortgage Renewal

Transfer

Ontario-specific. The land-registration instrument used to convey ownership or another interest in land.

Rates and Payments

Trigger point

A contract-defined threshold at which a fixed-payment variable mortgage requires action, such as a payment increase, lump sum or conversion.

Rates and Payments

Trigger rate

For some variable mortgages with fixed payments, the rate at which the payment no longer covers all interest due. The unpaid interest may increase the balance or trigger payment changes under the contract.

Commercial Mortgages

TMI (taxes, maintenance and insurance)

Also: taxes, maintenance and insurance

Commercial-leasing shorthand for taxes, maintenance and insurance, commonly charged to a tenant as additional rent under a net lease. The executed lease determines the included costs, allocation, caps, exclusions and reconciliation rights.

Commercial Mortgages

Triple-net lease

A commercial lease in which the tenant typically pays base rent plus specified taxes, insurance and maintenance, subject to actual wording.

Regulation and Compliance

Trust account

Ontario-specific. A designated account in which a brokerage, administrator, lawyer, or other regulated party holds money for others under applicable trust rules.

Property and Appraisals

Trustee

A person or entity holding and administering property for beneficiaries under trust terms. Mortgage authority depends on the trust and law.

Default and Enforcement

Underwriting

The process of evaluating the borrower, property, income, credit, loan structure, documents, risks, and compliance before approving and funding.

Credit and Debt

Undisclosed debt

A liability omitted from the application but found through credit, bank statements, title, legal searches or other evidence. It can change ratios and credibility.

Rates and Payments

Undivided interest

A co-owner’s share in the whole property rather than a physically separated portion. Lenders generally require all owners to grant security.

Mortgage Qualification

Unfunded condition

An approval requirement that has not yet been satisfied or accepted. Any unresolved material condition can prevent closing.

Construction Financing

Unfunded cost overrun

Project cost exceeding budget without committed financing or borrower liquidity. It can stop construction and impair collateral value.

Mortgage Insurance

Uninsured mortgage

A mortgage that is not protected by borrower-paid or lender-paid mortgage default insurance.

Legal and Title

Unit entitlement

Condominium term. The percentage or proportion allocated to a condominium unit for voting or common-expense purposes, as set out in the condominium documents.

Credit and Debt

Unlevered return

Property or project return before mortgage financing. It allows comparison without the effect of debt structure.

Rates and Payments

Usury

Charging interest above the criminal rate or otherwise contrary to applicable law. The legal calculation can include certain fees and charges, not only the stated rate.

Commercial Mortgages

Vacancy allowance

An underwriting deduction for expected vacancy and collection loss even when the property is currently fully occupied.

Mortgage Basics

Vacant possession

Possession delivered without occupants or tenancies, where required by the purchase agreement.

Income and Employment

Variable income

Income that changes with hours, commissions, bonuses, overtime, contracts or business performance. Multi-year history and current trend are important.

Rates and Payments

Variable-rate mortgage (VRM)

Also: VRM

A mortgage whose interest rate changes with a reference rate. Depending on the product, the payment may remain fixed until a trigger point or may change with the rate.

Mortgage Basics

Vendor take-back mortgage (VTB)

Also: VTB

A mortgage in which the seller finances part of the purchase price and takes mortgage security from the buyer.

Legal and Title

Vendor’s lien

An equitable claim a seller may have for unpaid purchase money in certain circumstances. Modern transactions typically address payment through registered security and lawyer control.

Mortgage Basics

Verification hierarchy

The lender’s preference among direct, independent and borrower-supplied evidence. More reliable evidence generally receives greater weight.

Income and Employment

Verification of employment

Confirmation of employment status, tenure, compensation, and sometimes probation or likelihood of continuance.

Mortgage Qualification

Voidable transaction

A transaction that may be set aside because of fraud, preference, lack of authority, incapacity, or another legal defect.

Mortgage Qualification

Waiver

The intentional relinquishment of a right or condition, such as waiving financing or inspection conditions in a purchase agreement.

Commercial Mortgages

Warehouse line

Commercial/lender term. A credit facility used by a mortgage originator to fund loans temporarily before sale or securitization.

Legal and Title

Well potability test

A laboratory test assessing whether well water meets specified drinking-water parameters at the test date. It does not guarantee future quantity or quality.

Rates and Payments

Wire verification protocol

A control requiring payment instructions and changes to be confirmed through an independent trusted channel before funds are sent.

Commercial Mortgages

Working farm

A property operated primarily for commercial agricultural production. Financing depends on farm cash flow, land, equipment and management experience.

Mortgage Basics

Wraparound mortgage

A financing structure in which a new mortgage wraps around an existing mortgage. It is complex and requires lender consent and legal advice.

Default and Enforcement

Writ of seizure and sale

Ontario-specific. A court-enforcement instrument filed with the sheriff that can bind a debtor’s interest in land and affect a sale or mortgage.

Default and Enforcement

Writ search

An Ontario execution search for judgments or writs that may affect a person’s dealings with land. Lawyers commonly perform it before mortgage funding.

Income and Employment

Year-to-date earnings

Income accumulated from the beginning of the calendar or fiscal year to the statement date. It is used to test current trend against prior years.

Property and Appraisals

Zone exception

A site-specific planning provision modifying general zoning rules. It can determine whether current or proposed property use is legal.

Property and Appraisals

Zoning

Municipal rules governing permitted uses, building form, density, parking, setbacks, and other development matters. Illegal or non-conforming use can affect value and mortgageability.

Property and Appraisals

Zoning compliance letter

A municipal response concerning zoning classification, permitted use, work orders, or compliance, depending on the municipality and request. ---

Property and Appraisals

Zoning conformity

The consistency of current property use and improvements with applicable zoning. Non-conformity can affect insurance, value and lender appetite.