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Canadian Financial, Real Estate and Mortgage Glossary
How often this word is used
62% - Often
62% - Often
|Synonyms:||common mortgage, customary, garden-variety, mainstream, standard|
Definition of conventional mortgage
- conventional mortgage
- 1. A property loan that does not exceed 80% of the purchase price and does not require loan insurance.
Related Terms and Acronyms:
Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
➥ Insures Canadian mortgage lenders.
- fixed rate mortgage (FRM) A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. This can be expressed as an 80% loan, or 80% LTV.
➥ A widely used term in the mortgage brokerage and lending industry, especially by mortgage underwriters.
- mortgage application A document in which a prospective borrower details his or her financial situation to qualify for a loan.
- Mortgage Broker (MB) One who finds clients perspective lenders at generally no cost. Mortgage Brokers have a special relationship with lenders and can offer their clients the best rates and service. CanEquity goes through great lengths to ensure you are serviced by the best Mortgage Brokers in Canada.
An individual or group who brokers deals between their clients and lenders.
➥ CanEquity is a mortgage brokerage.
A program that calculates the costs involved in a mortgage or determines what kind of mortgage a person can qualify for.
➥ CanEquity's mortgage calculator has been rated number one by the Globe and Mail.
The interest rate on a mortgage loan.
➥ You can compare mortgage rates using this website by clicking 'Rates' above.
prime lending rate (PLR)
The rate of interest charged on loans by chartered banks to their most creditworthy customers.
➥ Bank of Canada's prime (best) lending rate.
variable rate mortgage (VRM)
Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
➥ A type of mortgage loan offered by brokers and lenders.
More Related Terms and Acronyms
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