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CANADIAN MORTGAGE GLOSSARY TERMS
Here is a simple glossary of Canadian 
mortgage lending and finance related
terms.
To find the term you are looking for
quickly, simply click on the letter below.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
R
Rate
The percentage paid by a borrower for the use of money which is generally expressed as an annual percentage.
Rate Cap
A predetermined limit that dictates how much the interest rate on a loan can change, either at each adjustment period or over the life of the loan.
Rate Hold
The length of time, typically between 60 and 120 days, that a lender will guarantee a loan's interest rate once you are locked in. To lock-in your interest rate with CanEquity.com, fill out our easy-to-use online mortgage application.
Rate Index
A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable-rate loans.
Rate Lock-in
A written agreement or contract in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set time period.
Ratio
A comparison of two figures used to evaluate business performance (e.g. debt/equity ratio and return on investment). It is a relation in degree or number between two similar things.
Real Covenant
A covenant that is so related to an estate in land that the benefit passes to a purchaser or assignee of the land and may be enforced at law.
Real Estate
The physical land and appurtenances including structures affixed thereto.
Real Estate Agent
An individual who is licensed to represent a buyer or a seller of real estate in a sales transaction. Real estate agents typically work on commission.
Real Estate Attorney
An attorney or lawyer who specializes in real estate transactions. This includes dealing with property tax issues and the transfer of land and buildings.
Real Estate Broker
An individual who is licensed to represent a buyer or a seller of real estate and collects commissions for the work. Most brokers have agents working for them and they collect a portion of those commissions in exchange for providing office space, marketing, and other overhead.
Real Estate Investment Trust (REIT)
An investment trust that specializes in investing in real estate related investments, including mortgages, construction loans and real property in varying combinations.
Real Property
The interests, benefits, and rights inherent in the ownership of the physical real estate. It is the bundle of rights with which the ownership of real estate is endowed, with limitations, and does not include personal property. Often called "property", "real estate", or "land".
Reassessment
The process of creating a new base for property taxation by updating assessments to reflect more current values. Ontario had its first province-wide reassessment in 1997, its second in 2000, and its third in 2002.
Realty
Real property.
Rebate
A manufacturer's reduction on the price of a vehicle as an incentive for potential buyers to make a purchase. Rebates often appeal to buyers with no credit or less-than-perfect credit who do not qualify for the lowest-rate loan. A rebate may also appeal to first-time buyers who don't have much of a down payment or a trade in.
Rebate Card
A type of credit card where customers accumulate cash, points, merchandise, or services based on card usage. Customers basically receive a small pay back for using the card.
Recasting
Any increase in loan based in part or in total on unforeseen increased costs incurred during construction.
Receiver
In connection with mortgage actions, an appointee of a court, requested by a mortgagee, to receive and account for the rents and profits from the mortgaged premises.
Recession
A prolonged period of time (often defined as two successive quarters) in which economic activity declines or decreases.
Recognized Gain or Loss
The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.
Reconciliation
1. Getting two things to correspond. For example, making sure your chequebook agrees with the bank's records. 2. Reestablishing cordial relations.
Reconveyance
The transfer of title to the borrower after a mortgage is completely paid.
Redemption
The duty of a mortgagee, on being paid the principal, interest and costs due by the mortgagor, to hand to the mortgagor the title deeds together with an executed reconveyance of the mortgage property.
Refinancing
The act of paying off one mortgage with another mortgage to take advantage of lower interest rates. Refinancing is also used to transform equity into cash for vacations, home improvements, or for consolidating debt. CanEquity has access to some of the best refinance products available on the Canadian market.
Refund
1. To give back, return, or repay (typically money). 2. The excess of your withholding and estimated tax payments for the year that you paid over your tax liability. The Federal Government then issues a tax refund if you paid more taxes over the year for your tax bracket.
Regional Bank
A bank with a primary market in a regional or metropolitan area, but takes deposits from throughout the province in which it is located. In Canada it is generally called a Credit Union.
Registered Education Savings Plan
Education savings plans that grow tax free until a child is ready to pursue a post-secondary education, at which time the money is withdrawn to help finance the costs.
Registered Retirement Savings Plan (RRSP)
A savings plan introduced by the Federal Government to encourage Canadians to save money for retirement. The investment and the interest earned on the RRSP is sheltered meaning it will not be taxed as long as the funds remain in the plan.
Registry System
The system of land registration where all interests in land are recorded in chronological order. The registrar assumes no responsibility for the legal effect of the document.
Release of Covenant
An agreement by a lender to terminate the personal obligation of a mortgagor,
a. usually upon sale of a property to a new purchaser who is acceptable to the mortgagee, and who has signed an assumption agreement or other appropriate legal documents
b. releasing a guarantor whose covenant is no longer required.
Reliction
An increase in the amount of land that occurs when a body of water (such as a river or sea) permanently withdraws.
Relocation Benefits
Monetary assistance and other considerations given to employees who must relocate at their company's request. This can include reimbursement for packing and moving, house-hunting trips, and temporary housing/storage expenses.
Relocation Company
A company or business that specializes in providing assistance to individuals who are being relocated by their employers.
Renewal Agreement
An agreement whereby the lender may agree to extend the mortgage loan but possibly on revised terms as to principal repayments and interest rate.
Remaining Balance
The unpaid or remaining principal left on a loan.
Remaining Term
The length of time remaining for a borrower to pay off the rest of an installment loan as scheduled.
Rent Loss Insurance
Insurance that covers a loss in rental value or income if a property becomes unfit for habitation due to a hazard or damage.
Rent
A periodic payment or return that a tenant makes to an owner of land, as recompense for a right to use and profit from the exclusive occupation of that land, or any other corporeal property, for a determinable period of time.
Rent Roll
A statement listing the tenants in occupancy, the area or unit occupied by each, their lease expiry date and rent payable and other leasing details that may be required.
Repayment Period
With a home equity line of credit, that portion of the life of the loan that follows the draw period. During the repayment period, the borrower cannot take out any more money, but must pay down the loan.
Repayment Plan
Modifications made to the repayment terms of an existing loan after the borrower is delinquent. Often used when the borrower misses payments, but the lender does not foreclose.
Replacement Cost
Cost of replacing the subject property new with one having exactly the same utility.
Replacement Reserve
A cash reserve for the future replacement of fixed assets.
Repossession
If a borrower stops making payments on a property, the lender has the legal right to take back the property.
Reproduction Cost
The cost of reproducing a new replica property on the basis of current prices with the same or closely similar materials.
Resale Value
The price or dollar amount that a property owner is able to negotiate when selling an existing home or property.
Rescission
The cancellation of a contract as agreed by all of the parties involved.
Reserve Fund
Funds that are set aside or reserved by a home owner's association or condo board for major repairs and improvements to common areas.
Reserves
Formerly required to be maintained by the bank in accordance with Bank Act regulations, but are now phased out.
Resident Alien
A person who is living as a legal permanent resident, but is not a citizen of that country.
Residual Value
The value of the vehicle at the end of a lease agreement which is agreed upon at the time of signing.
Restrictive Covenant
A contract between neighbouring landowners restricting the use of one of the parcels. It must be negative in nature.
Restructured Loan
A mortgage in which basic terms -- such as interest rate, term and monthly payment -- are altered or restructured to prevent foreclosure on the property. This is not a regular practice in Canada.
Rests
The periodical balancing of an account made for the purpose of converting interest into principal, and charging the party liable therein with compound interest, e.g. half-yearly.
Retail Banking
Banking services offered to individual customers such as savings accounts, personal loans, cheque cashing, and RRSPs.
Retained Earnings
All of the profits or losses accumulated from prior years and from the present year's income statement, minus dividends paid to you.
Return
Any increase in value, profit, or income that is earned from an investment.
Return on Equity
The percentage that the annual cash flow after debt service is of the equity in the property.
Annual Cash Flow - Debt Service
Equity
Return on Investment
The percentage that the annual cash flow after debt service is of the cash investment in the property.
Return on Investment
The gains or profit from an investment that is typically expressed as equity divided by cash flow.
Reverse Mortgage
A type of mortgage loan that allows elderly homeowners to convert built-up equity into cash. The loan comes due if the homeowner sells, moves, or passes away.
Reversion
A right to future possession retained by an owner at the time of a transfer of an owner's interest in real property.
Revolver
A term used by credit card issuers for those card holders who do not pay their card balance in full each month. These card holders carry a partial balance into the next month. Approximately seven out of 10 cardholders revolve their debt.
Revolving Credit
A type of credit line that does not have a specified repayment schedule, but may require a minimum payment to cover interest and contribute to paying off the principal. This is typical for credit card loans, chequing account cash reserves, or overdraft accounts that have pre-approved lines of credit.
Revolving Line of Credit
An agreement between a lender and a borrower where the lender agrees to loan a specific amount to a borrower. Once the money is repaid, the borrower is allowed to borrow the amount again. Credit cards are an example of revolving credit.
Right of First Refusal
An agreement made by a property owner which gives a specific buyer the opportunity to purchase the property before it is offered to anyone else.
Right of Survivorship
The distinguishing feature of joint tenancies and tenancies by the entirety which provide that, where land is held in undivided portions by co-owners, upon death of any joint owner, their interest in the land will pass to the surviving co-owner, rather than to their heirs or devisees.
Right-of-way
The right to pass over another's land, more or less frequently, according to the nature of the easement.
Roll In
This term means that certain closing costs are included or rolled into the mortage loan. As a result, the borrower has lower out-of-pocket closing costs and higher monthly payments. See also "Roll-in Loans."
Roll-in Loans
A type of refinancing loan that incorporates any closing costs or fees into the loan. This type of loan is great for those who have a reasonable amount of home equity, who want to reduce overall interest expenses, and who plan to stay in their homes.
Roll Over Mortgage
A type of loan where the interest rate is set for a specific term. At the end of this term, the mortgage is said to "roll-over" and the borrower and lender may agree to extend the loan. If satisfactory terms cannot be agreed upon, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.
Royalty Income
Payments or money recieved for the use and exploitation of certain kinds of property, such as artistic or literary works, patents, and mineral rights.
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