Glossary of closing and mortgage terms

Mortgages and charges

Standard charge: A mortgage registered for the exact amount you borrowed. When you pay it off or move to another lender, it is discharged and replaced. Most traditional mortgages are standard charges.
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Collateral charge: A mortgage registered for more than you borrowed, so the lender can lend you more later without re-registering. The trade-off is that most other lenders will not take an assignment of it, so switching usually means a full discharge and a new registration at your cost.
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Assignment of charge: The transfer of an existing registered mortgage from one lender to another without discharging it. Cheaper and faster than a new registration, but generally only available on a standard charge.
Discharge: The registration that removes a paid-off mortgage from title. Lenders charge a processing fee for preparing it, separate from any legal fee.
Switch: Moving an existing mortgage balance to a new lender on substantially the same terms, without taking additional money out.
Refinance: Replacing your mortgage with a larger one and taking the difference in cash. Because the amount changes, a refinance always requires a new registration.
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Second registration: A separate charge registered behind the first, most often a home equity line of credit. It carries its own registration fee and its own set of signing documents.
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Home equity line of credit (HELOC): A revolving credit facility secured against your home. Almost always registered as a collateral charge, and often as a second registration alongside a mortgage.
Postponement: An agreement by an existing lender to let a new charge rank ahead of theirs. Required when you refinance a first mortgage while keeping a second in place.

Title and ownership

Title: The legal ownership of land, as recorded in the provincial land registry.
Title search: Your lawyer's review of the registry to confirm the seller owns the property and to find anything registered against it — mortgages, liens, easements, or executions.
Easement: A registered right for someone else to use part of your land, such as a utility corridor or a shared driveway. It stays with the land when you sell.
Encroachment: A structure that crosses a property line, like a fence or a shed built over the boundary.
Lien: A registered claim against a property securing a debt, such as unpaid contractor work or property taxes. It must normally be cleared before a sale can close.
Joint tenancy: Co-ownership where each owner holds the whole property together. If one owner dies, their interest passes automatically to the survivor.
Tenancy in common: Co-ownership in defined shares. Each owner's share passes under their will rather than automatically to the other owner.
Survey: A drawing prepared by a licensed surveyor showing boundaries and the position of structures. Title insurance is often used instead of ordering a new one.
Parcel register: The official registry record for a property, listing every instrument registered against it in order.

Closing mechanics

Requisition date: The deadline for your lawyer to raise objections to title. After it passes, most title problems can no longer be used to refuse to close.
Closing date: The date ownership transfers and the balance of funds is paid. Registration happens electronically during business hours, so keys are rarely available first thing in the morning.
Escrow closing: A closing where funds and documents are exchanged in trust on undertakings before registration is complete, used when registration cannot be finalised the same moment.
Undertaking: A binding promise from one lawyer to another to do something after closing, such as pay off and discharge an existing mortgage.
Direction re: title: The document telling the seller's lawyer exactly whose names go on title and in what shares.
Remote signing: Completing your closing documents by video with identity verification, rather than in person. Widely available, though some lenders still require attendance.
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Trust ledger: Your lawyer's accounting of every dollar received and paid out on your file, given to you at closing.

Money and adjustments

Statement of adjustments: The document reconciling the purchase price against the deposit, prepaid taxes, and every other credit and charge, to arrive at the balance due on closing.
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Adjustment: A line reallocating a cost between buyer and seller based on the closing date, most commonly property taxes the seller has already paid for part of your ownership period.
Deposit: Money paid to the listing brokerage when your offer is accepted. It is credited against the purchase price on closing, not an additional cost.
Cash required to close: The total you must deliver to your lawyer before closing: the balance of the price after the deposit and mortgage advance, plus land transfer tax, legal costs, adjustments and any taxes payable in cash.
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Disbursement: A cost your lawyer pays out on your behalf and bills back to you at cost — registration fees, search fees, couriers, software charges.
Per diem: A daily charge, usually interest on the unpaid balance, that applies when a closing runs past the agreed date.
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Land transfer tax: A one-time provincial tax on the transfer of land, calculated in marginal brackets on the purchase price. Toronto charges a second municipal tax on top.
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Rental item: Equipment at the property under a rental contract rather than owned outright, such as a hot water tank or furnace. You either assume the contract or the seller buys it out.

Insurance

Title insurance: A one-time-premium policy covering losses from defects in title, fraud, survey problems and certain unregistered issues that a search would not reveal.
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Lender's title policy: A title policy that protects only the lender, up to the mortgage balance. It gives the homeowner no coverage at all.
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Owner's title policy: A title policy that protects you as owner, for as long as you own the property. Usually a modest addition to the lender's premium if bought at the same time.
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Existing homeowner policy: An owner's title policy bought after closing, by someone who did not purchase one at the time. Available at any point while you own the home.
Mortgage default insurance: Insurance protecting the lender when you put down less than 20%. The premium is added to your mortgage, but the provincial tax on that premium is payable in cash at closing.
Insurance binder: Written confirmation from your property insurer, naming your lender as loss payee, that coverage is in place as of the closing date. Lenders will not release funds without it.

Who does what

Conveyancing lawyer: A lawyer who handles the transactional side of closings. Distinct from a litigator, who handles disputes.
Lender-directed closing: A refinance or switch where the lender assigns the file to a title services company rather than your own lawyer. Cheaper and faster, but you get no independent legal advice.
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Loss payee: The party named on your property insurance policy to receive proceeds — your lender, up to the mortgage balance.
Power of attorney: A document allowing someone else to sign on your behalf. Lenders impose strict conditions on accepting one for a mortgage.

New construction

Interim occupancy: The period when you live in a new condo before it is registered and you legally own it. You pay a monthly occupancy fee to the builder and build no equity.
Occupancy fee: The monthly amount paid to the builder during interim occupancy, made up of notional interest on the unpaid balance, estimated property taxes and common expenses.
Development and education levy: Municipal and school-board charges the builder passes on to you at closing. Your agreement may cap them — check before you waive conditions.
Tarion: The administrator of Ontario's new home warranty programme. Enrolment is charged to you at closing, and deposit protection limits differ between freehold and condominium purchases.
Pre-delivery inspection: Your walkthrough with the builder before closing, where defects are recorded on a form that governs later warranty claims.
Assignment: Selling your contractual right to buy a pre-construction unit before it closes, rather than selling the property itself.
HST new housing rebate: A partial rebate of the HST embedded in a new home's price, available where you or a close relation move in. Builders usually credit it in the price and take an assignment of it.
Delayed closing compensation: Statutory compensation payable by a builder when a closing is postponed outside the rules, subject to notice requirements and caps.

When things go wrong

Abatement: A reduction in the purchase price agreed before closing, usually to reflect a defect or a shortfall. It must be documented properly to be enforceable.
Mutual release: An agreement ending a purchase contract and settling what happens to the deposit. Signing one without advice can waive claims you did not know you had.
Specific performance: A court order requiring a party to complete the transaction rather than pay damages. Granted only where the property is genuinely unique.
Certificate of pending litigation: A registration against title signalling a court claim over an interest in the land. It effectively prevents a sale until resolved.
Anticipatory breach: Making clear before the closing date that you will not complete, which allows the other side to treat the contract as ended and claim damages immediately.
Damages: Compensation for loss caused by a failure to close. On a falling market this can exceed the deposit, typically the difference between your price and the eventual resale price plus carrying costs.