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Archives: Glossary

Pre-Payment Privilege

A pre-payment privilege is a mortgage term which allows a borrower to pre-pay their mortgage without incurring a penalty. When a mortgage has a pre-payment privilege, there is usually a lump sum payment privilege and a monthly payment privilege. Pre-payment privileges can range from 5% to 20%, meaning a borrower can increase their mortgage payment …

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Portability

A mortgage portability option allows a home owner to port or transfer their mortgage from one property to another with the same terms, rate and conditions, along with the same outstanding balance. Benefit Of Porting A Mortgage The benefit of porting a mortgage is that the home owner doesn’t break their current mortgage and avoids …

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Open Mortgage

An open mortgage is a mortgage that is fully open and free of any penalty for early repayment. An open mortgage usually carries a higher interest rate, and gives the borrower flexibility to pay the mortgage in full or large sums without incurring unnecessary costs. A home equity line of credit is usually considered an …

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Mortgage Payments

A mortgage payment is the payment amount, usually comprised of principal and interest payments, agreed upon as per mortgage approval documents, which a borrower makes to the lender as repayment for the mortgage. A mortgage payment is calculated based on the interest rate, compounded annually or monthly, as well as the amortization period. Interest rate …

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