Reference · November 2026
Canadian mortgage glossary
The terms that come up on a mortgage file, explained without making the client learn a new language.
Rules current as of November 2026. Always confirm with the lender, insurer or regulator.
Amortization
The total scheduled time to repay a mortgage, assuming payments continue as agreed. Insured amortization is generally 25 years, with 30 years available to eligible first time buyers and buyers of new builds.
BCFSA
The BC Financial Services Authority regulates mortgage brokers in British Columbia. Confirm licensing and conduct requirements with the regulator.
Blend and extend
A lender arrangement that combines an existing mortgage rate with a new rate and extends the term. Availability and the resulting rate depend on the lender and the mortgage contract.
CASL
Canada's anti spam law covers commercial electronic messages through consent, sender identification with contact details and unsubscribe requirements. Express consent lasts until withdrawn; implied consent from an existing business relationship generally lasts 2 years after the last transaction or 6 months after an inquiry. Unsubscribe requests must be honoured within 10 business days.
Certificate of completion
The record accompanying an electronically signed document that describes the signing events and evidence of completion. BrokerDam's certificate records signer authentication, consent, timestamps, IP address and a document hash.
Commitment letter
A lender's written offer setting out the mortgage amount, rate, term and conditions. Read the conditions and deadlines before treating the offer as ready to fund.
Conditions
Requirements that must be satisfied before a lender advances mortgage funds. These can include income verification, property documents and confirmation of the down payment.
E signature
An electronic indication that a person agrees to a document. The signing process and evidence of identity, consent and document integrity matter when assessing its reliability.
Employment letter
A letter from an employer confirming employment details such as position, income and employment status. A lender may verify the information and ask for other income documents.
FINTRAC
Canada's financial intelligence unit, the Financial Transactions and Reports Analysis Centre of Canada. Since October 11, 2024, mortgage brokers, lenders and administrators are reporting entities under the PCMLTFA, with obligations including a compliance program, client identification and record keeping.
FSRA
The Financial Services Regulatory Authority of Ontario regulates Ontario's mortgage brokering sector. Consult its guidance for licensing, conduct and compliance requirements.
GDS (Gross Debt Service)
Housing costs, including principal, interest, property tax, heat and half of condo fees, divided by gross income. The insured guideline is typically up to 39%, subject to insurer and lender requirements.
Gift letter
A document confirming that down payment funds are a gift rather than a loan that must be repaid. The lender sets the required wording and supporting evidence.
Insured mortgage
A mortgage covered by mortgage default insurance. Insurance protects the lender against borrower default, not the borrower against missed payments.
Insurable mortgage
A mortgage that meets applicable default insurance eligibility requirements even though the borrower is not necessarily paying an insurance premium. Confirm eligibility and pricing with the lender and insurer.
IRD (Interest rate differential)
A prepayment penalty calculation based on the difference between the mortgage's rate and a comparison rate over the remaining term. Lenders use different comparison rates and methods, so obtain the lender's payout figure.
KYC / identity verification
Know your client measures include verifying identity using accepted methods and keeping the required evidence. Mortgage reporting entities must follow the applicable FINTRAC requirements rather than relying only on knowing the client personally.
LOS (Loan origination system)
Software used to prepare and submit mortgage applications to lenders. Examples include Velocity by Newton, Filogix Expert and Finmo; it serves a different purpose from a mortgage CRM.
LTV (Loan to value)
The mortgage loan amount divided by the property's value, expressed as a percentage. Lenders use it when assessing equity, risk and product eligibility.
Maturity date
The date the current mortgage term ends. It is the point to arrange renewal, repayment or a move to another lender, not necessarily the date the entire loan is repaid.
Minimum down payment
For an eligible insured purchase, the minimum is 5% on the first $500,000 and 10% on the portion above that for prices below $1.5 million. At $1.5 million or more, the minimum is 20%. Eligibility and lender requirements still apply.
Mortgage CRM
Customer relationship software organized around mortgage contacts, deals, communication and the funded book. It supports the client relationship before an application and after funding, rather than replacing lender submission software.
Mortgage default insurance
Insurance required for eligible mortgages with a down payment under 20%, offered by CMHC, Sagen and Canada Guaranty. The insured purchase price cap is $1.5 million, with eligible prices below that cap; insurance protects the lender against default.
NOA (Notice of Assessment)
The Canada Revenue Agency's assessment of a filed income tax return. Lenders use it alongside other documents to review reported income and tax balances.
OSFI B-20
OSFI's guideline on residential mortgage underwriting for federally regulated lenders. It sets expectations for sound underwriting and risk management rather than promising an approval for any individual borrower.
Paystub
An employer's record of a pay period showing earnings and deductions, often with year to date totals. Review it with other income documents rather than treating a single pay period as the full income picture.
PCMLTFA
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It is the federal legislation behind Canada's reporting entity obligations to combat money laundering and terrorist financing.
PEP (Politically exposed person)
A person whose specified public role brings additional financial crime risk considerations, including applicable rules for family members and close associates. Follow FINTRAC guidance to determine status and the measures required.
PIPEDA
The Personal Information Protection and Electronic Documents Act, Canada's federal private sector privacy law. It governs the collection, use and disclosure of personal information in applicable commercial activities.
Port
Moving an existing mortgage to a different property under a lender's portability provisions. It depends on the contract, the new property and the lender's approval, so it is not an automatic right to keep the same financing.
Prepayment penalty
A charge that may apply when a borrower pays more than the mortgage permits or ends the term early. The contract determines the calculation, and the lender's payout statement is the authoritative amount.
RECA
The Real Estate Council of Alberta licenses mortgage brokers in Alberta. Consult its requirements for licensing and professional conduct.
Refinance
Replacing or changing mortgage financing, often to access equity or change the loan amount or repayment structure. Review qualification, penalties and closing costs before deciding whether the change benefits the borrower.
Renewal
Arranging a new mortgage term when the current term ends. Compare the lender's offer with the client's circumstances and available alternatives before signing.
Source of funds
The origin of money used in a mortgage transaction, including the down payment. Documents should explain where funds came from and support the lender's and brokerage's verification requirements.
Straight switch
Moving a mortgage to a new lender at renewal without increasing its balance or remaining amortization. Since November 2024, eligible uninsured straight switches between federally regulated lenders are exempt from OSFI's prescribed stress test minimum qualifying rate. The receiving lender still assesses the borrower and can apply its own underwriting requirements.
Stress test / Minimum qualifying rate
Borrowers generally qualify at the greater of the contract rate plus 2% or 5.25%, for insured and uninsured mortgages. Eligible uninsured straight switches have a specific exemption from OSFI's prescribed minimum qualifying rate; lender underwriting still applies.
T1 General
An individual's Canadian income tax return, showing income sources, deductions and the tax calculation. It provides detail that a Notice of Assessment alone may not show.
T4
The employer issued statement of remuneration paid for a tax year. It shows employment income and deductions reported to the Canada Revenue Agency.
TDS (Total Debt Service)
GDS housing costs plus all other debt payments, divided by gross income. The insured guideline is typically up to 44%, subject to insurer and lender requirements.
Term
The period covered by the current mortgage contract, including its rate and conditions. It is different from amortization, which describes the scheduled time to repay the entire loan.
Three months' interest
A prepayment penalty method based on three months of interest on the applicable mortgage amount. Confirm the contract's calculation and compare it with any applicable IRD calculation.
Underwriting
The lender's assessment of the borrower, property and application against its lending requirements. Document analysis helps prepare the file, but approval and lending terms remain the lender's decision.
Uninsured mortgage
A mortgage without mortgage default insurance. The lender assesses the application under its own requirements and any applicable regulatory rules.
Sources
These authorities publish the rules and guidance behind the definitions. This glossary is general information, not legal advice or a lending commitment.