Amortization
The full period used to pay off a mortgage. A longer amortization lowers the monthly payment but usually increases total interest paid.
Canadian Housing Dictionary
Real estate terms, translated into plain English
Use this glossary to decode Canadian housing language before you read a listing, compare a mortgage offer, review a condo document, or decide whether renting, buying, selling, or investing makes sense.
Short answer
Housing terms matter because small definitions can change cash needed at closing, borrowing power, legal risk, and monthly carrying cost. Search the term, then follow the related guide or calculator.
Showing 32 of 32 terms
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Appraisal Gap
The shortfall created when a lender's appraised value is lower than the purchase price. The buyer may need extra cash because the lender will not finance the unsupported amount.
Assignment Sale
A sale of the buyer's contract rights before a pre-construction property closes. The new buyer takes over the original purchase agreement, subject to builder and tax rules.
Benchmark Price
A quality-adjusted home-price measure used by many real estate boards to track a typical property over time more consistently than a simple average price.
Bully Offer
A pre-emptive offer submitted before the seller's planned offer date, often with a short expiry to pressure a quick decision.
Cap Rate
Capitalization rate is net operating income divided by property value. Investors use it to compare rental-property yield before financing effects.
CMHC Insurance
Mortgage default insurance required on most Canadian home purchases with less than 20% down. The premium protects the lender, not the borrower.
Condo Reserve Fund
Money held by a condo corporation for major repairs and replacements. A weak reserve fund can raise the risk of special assessments.
Debt Service Ratio
A lender measure of how much income is already committed to housing and other debt payments. GDS looks at housing costs; TDS includes other debts too.
Deposit vs. Down Payment
The deposit is paid soon after offer acceptance and held in trust. The down payment is the buyer's total equity contribution at closing, including the deposit.
Fixed-Rate Mortgage
A mortgage where the interest rate is locked for the term. It gives payment certainty but can carry higher penalties if broken early.
Gross Debt Service Ratio
The share of gross income needed for mortgage payments, property tax, heat, and usually half of condo fees. Lenders use it to screen affordability.
HELOC
A home equity line of credit secured by property equity. It is flexible debt, but variable rates and easy access can raise household risk.
Housing Affordability
A measure of whether typical local income can support typical housing costs. It usually combines prices, rates, rents, taxes, and income.
Land Transfer Tax
A closing cost charged by provinces and, in some cities, municipalities when property changes hands. It can materially change cash needed at closing.
Loan-to-Value Ratio
The mortgage amount divided by the property value. A $400,000 mortgage on a $500,000 property has an 80% loan-to-value ratio.
Mortgage Renewal
The point when a mortgage term ends and the borrower must accept a new rate, renegotiate, switch lenders, or pay out the loan.
Mortgage Stress Test
A federal qualification test requiring borrowers to prove they can afford payments at the higher of a benchmark floor or their contract rate plus a buffer.
Negative Equity
A situation where the mortgage balance is higher than the property value. It limits refinancing options and can make selling difficult.
Net Operating Income
Rental income left after normal operating expenses but before mortgage payments and income tax. It is central to cap-rate and rental ROI calculations.
Power of Sale
A lender remedy, common in Ontario, that allows a lender to sell a property after borrower default without the same court process as foreclosure.
Pre-Construction Condo
A condo bought from a builder before completion. Buyers face deposit schedules, assignment rules, occupancy fees, closing adjustments, and appraisal risk.
Price-to-Income Ratio
A rough affordability measure comparing home prices with household income. Higher ratios usually mean more stretched buyers or greater reliance on wealth and debt.
Qualifying Rate
The rate a borrower must prove they can afford under the mortgage stress test, which may be higher than the actual contract rate.
Rent Control
Rules that limit how much rent can rise for covered tenancies. Coverage varies by province and property type, so local rules matter.
Rent vs. Buy
A comparison of the unrecoverable costs, savings rate, investment returns, time horizon, and lifestyle risk of renting versus owning.
Special Assessment
An extra payment charged to condo owners when the corporation needs money beyond normal fees and reserves, often for repairs or legal costs.
Status Certificate
A condo document package covering financial statements, reserve fund details, insurance, legal issues, rules, and monthly fees.
Supply Overhang
A buildup of listings, completions, or unsold units that can pressure prices if buyer demand does not absorb the inventory.
Tarion Warranty
Ontario's new-home warranty system. It covers certain deposit, defect, delayed-closing, and structural issues within defined limits and timelines.
Vacancy Rate
The share of rental units available for rent in a market. Low vacancy usually increases renter pressure and landlord pricing power.
Variable-Rate Mortgage
A mortgage whose rate changes with lender prime rates. Payments or amortization can shift when interest rates move.