Glossary of Mortgage and Real Estate Terms

Buying, selling, or refinancing a home can feel overwhelming — especially when unfamiliar mortgage and real estate terms are thrown around. This glossary is designed to help Canadian homeowners and buyers quickly understand the key terminology they’ll encounter when working with lenders, brokers, or lawyers.

• Amortization Period — The total length of time it will take to pay off your mortgage, often 25 or 30 years in Canada.
• Appraisal — A professional estimate of a property's market value, often required by lenders before approving a mortgage.
• Closed Mortgage — A mortgage that cannot be fully paid off, refinanced, or renegotiated before the term ends without penalties.
• CMHC (Canada Mortgage and Housing Corporation) — A federal Crown corporation that provides mortgage default insurance for buyers with less than 20% down.
• Conventional Mortgage — A mortgage where the down payment is at least 20% of the purchase price (no default insurance required).
• Equity — The difference between your home's market value and the amount you still owe on your mortgage.
• Fixed-Rate Mortgage — A mortgage with an interest rate that stays the same for the entire term.
• HELOC (Home Equity Line of Credit) — A revolving line of credit secured against your home’s equity.
• MLS (Multiple Listing Service) — A database used by Canadian real estate agents to list and search properties.
• Offer to Purchase — A written agreement by a buyer to purchase a property under specific terms and conditions.
• Open Mortgage — A mortgage that allows you to make lump sum payments or pay it off entirely without penalty.
• Pre-Approval — An initial confirmation from a lender of how much mortgage you may qualify for, based on income, credit, and debt.
• Spousal Buyout — A specialized mortgage program in Canada allowing one spouse to refinance the home and buy out the other after separation or divorce.