Glossary
Down payment
GeneralThe upfront cash you pay when buying a home or other large purchase. In Canada the minimum is 5% on the first $500,000, 10% on any portion between $500,000 and $1.5 million, and 20% on homes priced at $1.5 million or more. A larger down payment means a smaller mortgage and less interest paid over time.
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Mortgage
A loan specifically for buying property, where the property itself serves as collateral. In Canada, mortgages typically have 5-year terms within a longer 25-year amortization. On-reserve, Ministerial Loan Guarantees may be required.
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Equity
The portion of an asset you actually own. For a home, equity is the market value minus the remaining mortgage. Equity grows as you pay down the loan or if the property value rises.