Plain-English definitions for 102+ Canadian financial terms — from APR to RRSP to stress test.
Showing 102 of 102 terms
The true yearly cost of borrowing, including fees and interest.
The total length of time to pay off a loan through scheduled payments.
A secured loan used to finance a vehicle purchase, with the vehicle as collateral.
A mortgage that can be transferred from seller to buyer, keeping the original rate and terms.
A payment schedule that adds roughly one extra monthly payment per year.
A legal process for individuals unable to repay debts, offering a fresh financial start.
Canada's central bank, responsible for monetary policy and setting the overnight rate.
A financial plan that allocates income to expenses, savings, and debt repayment.
Short-term financing to bridge the gap between buying a new home and selling your current one.
A fixed payment that combines principal and interest.
Moving credit card debt to a card with a lower promotional rate.
A 3-digit number (300–900) indicating your creditworthiness to lenders.
A detailed history of your borrowing and repayment activity.
Agencies (Equifax, TransUnion) that collect and report consumer credit data.
Federal Crown corporation that provides mortgage default insurance for high-ratio mortgages.
An asset pledged to secure a loan, which the lender can seize if you default.
A legal alternative to bankruptcy where you offer to repay a portion of your debts.
A measure of the average change in prices of a typical basket of consumer goods.
Fees and expenses paid at the completion of a real estate transaction, typically 1.5–4% of purchase price.
A revolving credit facility allowing purchases up to a limit, with a standard 19.99% interest rate.
The maximum amount a lender allows you to borrow on a credit card or line of credit.
The percentage of available revolving credit you're currently using.
Federal insurance protecting bank deposits up to $100,000 per depositor category.
Interest calculated on both the principal and previously earned interest, accelerating growth.
A member-owned cooperative financial institution offering banking services.
The legal maximum lenders may charge under Canada's Criminal Code.
A mortgage with limits on prepayment and penalties for breaking it.
Withdrawing cash using a credit card, with immediate interest.
A contributory public pension based on your working earnings.
The percentage of your gross income that goes toward debt payments.
The upfront cash you pay toward a home purchase, expressed as a percentage of purchase price.
Combining multiple debts into a single loan, typically at a lower interest rate.
Failure to make required loan payments as agreed with the lender.
Paying off debts from highest interest rate to lowest.
Paying off debts from smallest balance to largest.
A liquid savings reserve covering 3–6 months of living expenses for unexpected events.
An interest rate that stays the same for the entire loan term.
A legal process where a lender takes ownership of a mortgaged property after default.
A buyer who has not owned a home in the last 4 years, qualifying for special programs.
A new registered account combining RRSP and TFSA benefits specifically for first-time home buyers.
Housing costs as a percentage of gross income — max 39% for CMHC-insured mortgages.
A deposit that pays a fixed or set return over a fixed term.
The interest-free window between a credit card statement and its due date.
A credit check that occurs when you apply for new credit, visible to lenders.
A revolving credit line secured by your home equity, up to 80% LTV.
The portion of your home's value you actually own, free of mortgage debt.
Allows first-time buyers to withdraw up to $35,000 from their RRSP tax-free for a home purchase.
A savings account offering above-average interest rates, often at online banks.
The percentage charged on the principal loan balance per period.
The state of being unable to pay debts as they become due.
The rate at which the general price level of goods and services rises over time.
A mortgage penalty based on the gap between your rate and current rates.
The length of time you agree to specific loan conditions before renewal.
The percentage of a property's value financed by a mortgage.
A provincial tax paid when purchasing real property, calculated as a percentage of purchase price.
A revolving credit facility allowing flexible borrowing up to a limit, with interest on drawn amounts.
An upfront fee charged by lenders to process a new loan application.
An extra one-time payment applied directly to principal.
A federally regulated professional who administers proposals and bankruptcies.
A secured loan used to purchase real estate, with the property as collateral.
A Canadian requirement to qualify for a mortgage at a higher rate than the contract rate.
Renegotiating mortgage terms at the end of a term without refinancing the full mortgage.
The smallest amount you must pay on a credit card each month to avoid penalties.
The ability to transfer your existing mortgage to a new property without penalty.
A licensed professional who shops multiple lenders for you.
A lender's conditional commitment to lend up to an amount at a held rate.
The total value of your assets minus all your liabilities.
A charge when a payment bounces due to insufficient funds.
When your loan balance grows because payments don't cover interest.
CRA's summary of your tax return, including your RRSP room.
The interest rate at which major banks lend each other money overnight.
Canada's federal regulator of banks, insurance companies, and mortgage rules.
A mortgage you can repay in full at any time without penalty.
A monthly federal pension for most Canadians 65 and older.
The base lending rate banks use, tied to the Bank of Canada overnight rate.
The original loan amount borrowed, before interest is applied.
A fee charged by lenders when you pay off or break a mortgage before the term ends.
An unsecured or secured loan for personal use, repaid in fixed monthly installments.
A lender's right to sell a mortgaged property upon default, without court involvement.
The right to make extra mortgage payments without penalty, typically 10–20% of original amount annually.
A small, very short-term loan with extremely high borrowing costs.
Replacing an existing loan with a new one, usually to get a better rate or access equity.
A tax-deferred savings account for retirement, with deductible contributions.
A mandatory account RRSP converts to at age 71, requiring minimum annual withdrawals.
The cumulative amount you are allowed to deposit into your registered accounts.
A legal professional who manages title transfer, mortgage registration, and closing procedures.
A guarantee to keep an interest rate available for a set period.
A tax-sheltered account for a child's post-secondary education.
A credit check that does not affect your credit score.
A loan backed by collateral — an asset the lender can seize if you default.
Government or private financing for post-secondary education costs in Canada.
The percentage of income saved rather than spent, a key indicator of financial health.
A credit card backed by a cash deposit, used to build credit.
All monthly debt payments as a percentage of gross income — max 44%.
A flexible registered account where investment growth and withdrawals are completely tax-free.
Insurance protecting against defects in a property's title or ownership history.
Growth or income that is not taxed until withdrawal, allowing faster compounding.
Investment gains that are never subject to income tax, like TFSA earnings.
The entire amount paid above the principal over the life of a loan.
The rate at which a fixed variable-mortgage payment covers only interest.
A loan with no collateral — lenders rely solely on your creditworthiness.
An interest rate that fluctuates based on the prime rate.