Mortgage Glossary

A firm offer is an offer to purchase a home without any conditions attached. If you need financing to complete the purchase of a home, do not opt for a Firm Offer until your mortgage financing is fully approved by your Lender.

A savings account that is a registered plan that allows first-time homebuyers to contribute up to $8,00 per year, with a total limit of $40,000. When money is deposited in a FHSA you get the benefit of tax deductibility like an RRSP and amounts withdrawn for a house purchase are tax-free, like with a TFSA.

This is the mortgage registered in first position on title against a property. Why does your position on a mortgage matter? Because, the first mortgage has priority over other claims in the event of a sale or default. This means it would be paid first ahead of the other claims.

You will be considered to be a first-time home buyer if you did not, at any time in the current calendar year or at any time in the preceding four calendar years, live in a home as your principal place of residence that either you owned or jointly owned, or your current spouse or common-law partner owned or jointly owned.

With a fixed-rate mortgage, your interest rate and monthly payments stay the same for the entire mortgage term. The downside of a fixed-rate mortgage? They tend to have higher interest rates than Variable-Rate or Adjustable-Rate Mortgages. However, there is a potential upside, if mortgage interest rates go up during the term, you're protected because your rate stays the same.  Typically, the longer the term of the mortgage, the higher the mortgage rate. For instance, a 5-year mortgage will typically have a higher interest rate than a 2-year mortgage.