Mortgage
GeneralA 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.
Related terms
-
Down payment
The 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.
-
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.
-
Fixed rate
An interest rate that stays the same for the entire term of the loan or mortgage. Fixed rates provide certainty — your payment amount will not change — but may start higher than variable rates.
-
Variable rate
An interest rate that changes with the market, usually tied to the Bank of Canada prime rate. Variable rates may start lower than fixed rates but can increase, making payments less predictable.
-
Ministerial Loan Guarantee
A federal guarantee that backs loans for on-reserve housing when land cannot be used as collateral (because reserve land cannot be seized under Section 89). Without this guarantee, most banks will not lend for on-reserve homes. Your band council must pass a BCR to support the application.