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A mortgage rate is the interest rate charged by a lender on a mortgage loan. It determines how much you'll pay in interest over the term of the loan and affects your monthly mortgage payments.

Mortgage payments are comprised of your principal (the borrowed portion of your loan) and the interest (interest on your borrowed funds). You may opt into mortgage insurance, paying your taxes through your lender or other extraneous services, which may be included in your draw from your lender, however these are considered separate and not "part" of your mortgage payment.

A fixed-rate mortgage is a type of home loan where the interest rate remains constant for the entire term of the loan. This means that your monthly principal and interest payments will stay the same, regardless of changes in market interest rates.

A variable-rate mortgage is a home loan where the interest rate fluctuates over time based on market conditions. The rate usually starts lower than a fixed-rate mortgage but can increase or decrease during the loan term, causing monthly payments to change.

An adjustable rate mortgage is different from a fixed or variable rate mortgage in that the payments remain the same, but as the market conditions change, the amount that would go to principal vs interest may vary. For example, if rates increase, more of your payment may go to interest than to principal. Adjustable rate mortgages also have a built-in trigger rate - where if the market conditions have increased rates to this trigger rate, they are able to increase your mortgage payments to accommodate this increased interest payment. If not for this trigger rate, it could actually add a balance to your principal instead of pay it down, thus increasing your amortization.

Loan-To-Value (LTV) is fairly straightforward - the ratio between your loan amount and the value of your property.

For example if your property is valued at $500,000, and your loan is currently $400,000, your LTV would be 80%.

LTV = 400,000/500,000 * 100

= 80%

Amortization is the process of gradually paying off a loan, such as a mortgage, through scheduled payments over time. Each payment includes principal and interest. As you pay down your mortgage, the amount going toward interest decreases, and the amount going toward principal increases - which makes sense as your principal balance decreases as you continue to make payments. Amortizations standardly start in Canada at either 25 or 30 years, depending on the loan.

Mortgage terms are a determined amount of time that you and your lender have agreed upon several factors, namely your rate, repayment terms, rate type, length of term, etc. Terms can range in length from 6 months to 10 years.

A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders. They help clients find and secure the best mortgage deals by comparing loan options from various banks or financial institutions. Mortgage brokers offer personalized advice, manage the application process, and negotiate terms on behalf of the borrower, typically earning a commission from the lender once the mortgage is finalized.

A major bank as a lender offer services like checking and savings accounts, credit cards, investments, and loans, in addition to mortgages. This means clients can bundle financial products, which can simplify banking and sometimes lead to discounts or better rates. Major banks are heavily regulated by the Office of the Superintendent of Financial Institutions (OSFI) and must follow strict lending practices, which can provide some peace of mind. They also offer insured mortgage options backed by government entities like CMHC (Canada Mortgage and Housing Corporation).

Examples: Scotiabank, TD, Bank of Montreal (BMO)

A credit union is a member-owned, cooperative financial institution that offers many of the same financial services as traditional banks, including mortgages. Unlike banks, which operate for profit and have shareholders, credit unions are not-for-profit organizations where profits are reinvested back into the institution or shared with members, often through lower fees or better rates. Sometimes they may have programs that are slightly more flexible than regular banks.

Example: Meridian Credit Union, Kawartha Credit Union, Libro Credit Union

A monoline lender is an institution that specializes in mortgages only, without offering the broad range of services provided by traditional banks, such as checking accounts, credit cards, personal loans, etc. Monoline lenders often get their funding through large financial institutions or capital markets, which allows them to offer competitive rates. They typically work through mortgage brokers and may not be as well-known to consumers as major banks, but they can be a good option for those looking for specific mortgage solutions. These are usually traditional mortgages, excluding specific branded-programs. Monoline lenders are heavily regulated by the Office of the Superintendent of Financial Institutions (OSFI) and must follow strict lending practices, which can provide some peace of mind. They also offer insured mortgage options backed by government entities like Canada Mortgage and Housing Corporation (CMHC).

Examples: First National, MCAP

An alternative lender for a mortgage, previously known as a B-lender, is a financial institution that provides mortgage options for borrowers who do not qualify for traditional mortgage financing from major banks or credit unions, often due to issues such as lower credit scores, non-traditional income, or high debt levels. These lenders offer more flexible lending criteria but typically charge higher interest rates and fees to offset the increased risk.

Examples: Home Trust, Equitable Bank, B2B Bank, Haventree Bank

A private lender is an individual or organization that offers mortgage loans directly to borrowers without the involvement of traditional financial institutions, such as banks or credit unions. Private lenders are usually the option if alternative lenders are not an option. Private lenders typically serve borrowers who cannot qualify for conventional or alternative mortgages due to factors like poor credit, insufficient income documentation, or high debt levels. Some positives are that they are usually much quicker to close on a deal, more flexible requirements, and unlike traditional lenders, want to know the exit strategy to get the client into an alternative or traditional mortgage space. Private lenders usually include mortgage investment corporation. Loan-to-Value for private lenders is usually at a maximum of 75%.

Examples: Calvert Home Mortgage Investment Corporation, Threepoint Capital, Westboro MIC.

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Canadian government responsible for regulating and supervising financial institutions, such as banks, insurance companies, and pension plans. OSFI ensures the safety and soundness of these institutions, promoting confidence in the financial system while protecting depositors, policyholders, and pension plan members.

The Financial Services Regulatory Authority of Ontario (FSRA) is an independent regulatory agency that oversees the financial services sector in Ontario, Canada. FSRA regulates a wide range of financial entities, including insurance companies, credit unions, mortgage brokers, pension plans, and other financial service providers. Its main role is to protect consumers, promote fair and transparent markets, and ensure the stability of the financial system in the province.

A home appraiser is a licensed professional who evaluates the market value of a property. They conduct thorough inspections of a home, considering factors like location, condition, size, and comparable property sales in the area. Appraisers are often hired during the mortgage approval process to provide an unbiased estimate of the property's worth, ensuring that the lender doesn't loan more than the home's actual value.