What is a mortgage?

What is a mortgage?  According to the Ontario Mortgages Act, R.S.O. 1990 c.M.40 (the legislation that governs mortgages in Ontario), the word mortgage is defined as, “any charge on any property for securing money or money’s worth.”

Most consumers would not necessarily understand that technical definition.  In actuality, a mortgage is evidence of a debt.  It is both an interest in land created by the mortgage contract and security for a debt.  However, the more common definition of a mortgage states that:  A mortgage is a loan secured by real property

what is a mortgage?That is a straightforward, simple definition, but there is more to a mortgage than this.  This definition must be broken down into its core components.

A loan

This is the amount of money advanced to a borrower. 


This means that a Charge (a legal document that outlines the terms of the loan) is registered on title of the property to secure the loan.  If the borrower defaults on the loan, the lender has the right to exercise its interest in the security through several methods. 

Pause for clarification – Title

Title is a term that refers to the ownership of a bundle of rights that its owner has in a property, typically fee simple ownership.  If something is registered “on title” it means that it is officially registered against the ownership of the property through the Land Titles Office, where property ownership is recorded.

ortgage brokering in Ontario is regulated by the Financial Services Commission of Ontario (FSCO) and requires a license.  To obtain a license you must first pass an accredited course.  The Real Estate and Mortgage Institute of Canada Inc. (REMIC) is accredited by FSCO to provide the course.  For more information please visit us at www.remic.ca/getlicensed or call us at 877-447-3642.

Real Property 

Real property is the term used to describe the home and the land upon which it resides.  It is a legal term that differentiates real estate ownership from other types of property such as personal property.  Personal property is comprised of items that are typically movable property, also often referred to as chattels.

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