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PERSONAL > Housing > The ABCs of mortgage financing
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| Amortization |
| Number of months required to repay the loan and interest in full. |
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| Term |
| Period of the loan during which certain terms and conditions apply, such as the interest rate and payment frequency. |
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| Initial downpayment |
| Amount payable when purchasing property. Normally, this amount must come from your own savings. |
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| Conventional loan |
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Loan for which an initial downpayment of at least 20% is made.
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| Insured loan |
| Loan for which a downpayment of less than 20% is made. The Bank must insure the loan through a recognized loan insurer, i.e., Genworth Financial Canada or CMHC. |
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| Canada Mortgage and Housing Corporation (CMHC) |
| National organization responsible for housing and mortgage loan insurance in Canada. |
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| Genworth Financial Canada (Genworth) |
| Accredited private mortgage loan insurer. |
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| Closed term loan |
| A loan which cannot be repaid until the term expires without paying a penalty to the bank. |
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| Open term loan |
| A loan which can be repaid before the term expires without paying a penalty. |
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| Fixed rate |
| The interest rate applicable to a loan, which stays the same over the course of the term. |
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| Variable rate |
| The interest rate applicable to the loan, which can fluctuate over the course of the term. |
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| Capped variable rate |
| A variable interest rate with a maximum rate that cannot be exceeded. |
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| Mortgage line of credit |
| Line of credit which is secured by a mortgage. |
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| Refinancing |
| Renegotiation of a loan to obtain an additional amount with new terms and conditions. |
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| Renewal |
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Renewal of a mortgage loan at expiry, with new terms and conditions (e.g., term, interest rate).
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