Fixed rate loan
A loan where the interest rate and payment amount do not change during the term.
Gross Debt-Service Ratio
The percentage of a borrower’s gross income (before deductions such as income tax) required to cover the monthly costs associated with a home, such as mortgage payments, property taxes and heating.
Gross Household Income (Lending)
This amount is the total salary, wages, commissions and other assured income, before deductions, by all household members who are co-applicants for the loan or line of credit.
A person on the loan or line of credit who guarantees payment on behalf of the borrower in the event that that the borrower is unable to make the payments. The guarantor does not receive any direct benefit from the loan proceeds.
Home equity (Lending)
The current market value of a home, minus the amount of any debts registered on the property, such as liens or mortgages. It is essentially the amount of ownership that has been built by the owner through mortgage payments and appreciation of their home.
For example, if the market value of a property is $250,000 and the mortgages on the property total $200,000, the owner’s home equity is $50,000 ($250,000 - $200,000 = $50,000).
Home equity line of credit
A secured line of credit borrowed against the equity in your home. Funds are borrowed once, but can be accessed any time, up to the limit specified. The credit limit is usually larger than other forms of unsecured borrowing.
A loan that is repayable either in fixed instalments of principal, plus interest, or in blended instalments of both principal and interest.
A charge for money borrowed generally stated as a percentage of the amount borrowed.
The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal.
Payments made by the borrower on the loan that only go towards interest that is accrued on the loan. No payments are made to the principal.