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Amortized mortgage: A mortgage requiring periodic payments which include both a partial repayment of the debt and interest on the outstanding balance.

Basis point: A small unit of measure used to describe changes of less than one per cent in debt instruments such as mortgages. One basis point is equal to one-hundredth of one percent. (For example, a rate change of one quarter of a percent equals 25 basis points).

Blanket mortgage: A single mortgage registered against two or more individual parcels of real property.

Blended mortgage payments: Equal or regular mortgage payments, consisting of both a principal and an interest component.

Blended mortgage rate: The interest rate on an increased mortgage, which is derived from a formula, takes into account the interest rate on the existing loan and the interest rate on the increase mortgage amount.

Conventional mortgage: A mortgage loan that is 75 per cent or less of the loan-to-value ratio, and does not require mortgage insurance.

Equity: The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner's stake in the property.

Gross debt service (GDS) ratio: The amount a lender will permit a borrower to use from his/her gross income in order to qualify for a loan for housing costs, including mortgage payment and taxes (and condominium fees, when applicable). Total Debt Service (TDS) Ratio is the maximum percentage of a borrower's income that a lender will consider for all debt repayment (other loans and credit cards, etc.) including a mortgage.

High-ratio mortgage: A mortgage that exceeds 75 per cent of the loan-to-value ratio must be insured by either the Canada Mortgage and Housing Corporation (CMHC) or a private insurer to protect the lender against default by the borrower who has less equity invested in the property.

Mortgage: A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt.

Mortgage insurance: Government-backed or private-backed insurance protecting the lender against the borrower's default on high-ratio (and other types of) mortgages.

Mortgage prepayment penalty: A fee paid by the borrower to the lender in exchange for being able to break a contract (a mortgage agreement). This fee is usually three months' interest but can be higher, or it can be the equivalent of the loss of interest to the lender.

Mortgage broker/consultant: An individual or company that arranges mortgages between borrowers and lenders. The mortgage broker is usually paid by the lender not the client obtaining the mortgage.

P.I.T.: Equals principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxes on your mortgage payment.

Prepayment clause: A clause inserted in a mortgage, which gives the borrower the privilege to pay all or part of the mortgage debt in advance of the maturity date.

Principal: The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.

Portable mortgage: A mortgage loan in which the terms, conditions and interest rate can be transferred to a new property. It provides the homeowner with the flexibility to sell one home and buy another.

Rate lock: A guarantee by a lender to a borrower of a set interest rate for a set time period.

Vendor take-back mortgage: When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.a