Real estate glossary | SO&Co.
Glossary of real estate terms for Toronto buyers
  • Amortization Period: The actual number of years it will take to pay back your mortgage loan.
  • Appraised Value: An estimate of the value of the property. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.
  • Assumability: Allows the buyer to take over the seller’s mortgage on the property.
  • Closed Mortgage: A mortgage that locks you into a specific payment schedule.
  • Condominium: The owner has title to a single unit, as well as a share in the common elements such as elevators or surrounding land.
  • Condominium Fee: A common payment among owners that is allocated to pay expenses.
  • Conventional Mortgage: A mortgage loan issued for up to 75% of the property’s appraised value or purchase price, whichever is less.
  • Down Payment: The buyer’s cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.
  • Equity: The difference between the homes selling value and the debts against it.
  • High Ratio Mortgage: A mortgage that exceeds 75% of the home’s appraised value. These mortgages must be insured for payment.
  • Interest Rate: The value charged by the lender for the use of the lender’s money. Expressed as a percentage.
  • Land Transfer Tax, Deed Tax or Property Purchase Price: A fee paid to the municipal and/or provincial government for the transferring of the property from seller to buyer.
  • Maturity Date: The end of the term at which time you can pay off the mortgage or renew it.
  • Mortgagee: The person or financial institution that lends the money.
  • Mortgagor: The borrower.
  • Mortgage Insurance: Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.
  • Mortgage Life Insurance: Pays off the mortgage if the borrower dies.
  • Open Mortgage: Allows partial or full payment of the principal at any time, without penalty.
  • Portability: A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.
  • Pre-Approved Mortgage: Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a “firm” offer when you find the right home.
  • Prepayment Privileges: Voluntary payments in addition to regular mortgage payments.
  • Principal: The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.
  • Refinancing: Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.
  • Renewal: Re-negotiation of a mortgage loan at the end of a term for a new term.
  • Second Mortgage:: Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.
  • Term: The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.
  • Title: Legal ownership in a property.
  • Variable Rate Mortgage: A mortgage with fixed payments but fluctuating with interest rates. The changing interest rate determines how much of the payment goes towards the principal.
  • Vendor Take-Back Mortgage: When the seller provides some or all of the mortgage financing in order to sell their property.