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🏡 Mortgage Terms Made Simple: A First-Time Homebuyer's Guide

Let's face it—mortgage and homebuying terms can feel like a whole new language. That's why I've broken down the most common ones you'll encounter so that you can move forward with confidence.

🔑 Types of Mortgages

  • Closed Mortgage
  • Locked in for the term. If you break or refinance your loan early, you will likely incur a penalty.
  • Open Mortgage
  • Pay off anytime without fees. Flexible, but usually has a higher rate.
  • Convertible Mortgage
  • Start short-term with the option to switch to a longer term—no penalty.
  • High-Ratio Mortgage
  • Less than 20% down? You'll need mortgage insurance (e.g., CMHC or Sagen).

💰 Mortgage Rates

  • Fixed Rate
  • Your interest rate stays the same throughout your term—no surprises.
  • Variable Rate
  • Your rate fluctuates with the market (based on prime), which can save you money or cost you more.

🏁 Closing Costs You'll Want to Plan For

  • Appraisal Fee – A professional opinion of the home's value.
  • Interest Adjustment – Covers the days between your closing date and the first payment.
  • Land Transfer Tax – Applies in some provinces (including Alberta on certain transactions.
  • Legal Fees & Disbursements – Your lawyer handles the paperwork and protects your interests.
  • Prepaid Adjustments – Reimbursement to the seller for prepaid taxes or utilities.
  • Property Survey – Confirms boundaries and structure locations.
  • Sales Taxes – Especially for New Builds—GST May Apply.

🧠 Must-Know Mortgage & Real Estate Terms

  • Amortization – The full length of time it'll take to pay off your mortgage (usually 25 years).
  • Down Payment – The upfront cash you put toward your purchase (minimum 5% in most cases).
  • CMHC or Sagen (formerly Genworth) – Insures your mortgage if your down payment is under 20%.
  • Inspection – A home check-up to spot any costly surprises.
  • Pre-approval – Know what you qualify for and lock in a rate before you start shopping.
  • Porting – Taking your existing mortgage to a new property.
  • Refinancing – Reworking your mortgage terms or borrowing more.
  • Renewal – Renegotiating your mortgage when your current term comes to an end.
  • Term – The period during which your rate and terms are locked in (e.g., 5 years).
  • Prepayment – Paying down your mortgage ahead of schedule (watch for penalties).

Whether you're buying your first home, refinancing, or investing, having the right terms in your toolkit helps you make smarter decisions. If you ever need clarity or guidance, please don't hesitate to reach out. I'm here to guide you every step of the way.