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Mortgage Terms: Glossary

Plain-language explanations to help make mortgages in Nova Scotia easier to understand.

Mortgages in Nova Scotia: Key Terms Explained

Understanding mortgages in Nova Scotia often means navigating unfamiliar terms and financial language. This glossary explains commonly used mortgage and home buying terms in clear, plain language to help buyers better understand how mortgages work and what to expect throughout the purchasing process.

The definitions below are intended as general guidance and reflect typical terminology used in Nova Scotia mortgage and real estate transactions. Not every term will apply to every situation, but having a clear understanding of this language can make mortgage conversations and home buying decisions more informed and confident.

Term: Amortization

The total length of time it will take to fully repay a mortgage if regular payments are made as scheduled. In Canada, amortization periods are commonly 25 or 30 years, depending on mortgage type and lender requirements.

Term: Appraisal

An independent assessment of a property’s value, typically required by a lender to confirm the purchase price aligns with market value. Appraisals are often arranged by the lender and may be paid by the lender or the buyer.

Term: CMHC Insurance

Mortgage default insurance required for homes purchased with a down payment of less than 20 percent. The insurance protects the lender, not the borrower, and is typically added to the mortgage balance.

Term: Down Payment

The portion of the purchase price paid by the buyer at closing and not financed through the mortgage. Minimum down payment requirements in Canada depend on the purchase price and mortgage program.

Term: Fixed-Rate Mortgage

A mortgage with an interest rate that remains the same for the entire term of the loan. Fixed-rate mortgages offer predictable payments and protection from interest rate changes during the term.

Term: Mortgage Broker

A licensed professional who works with multiple lenders to help borrowers find mortgage options suited to their financial situation. Mortgage brokers do not lend money directly but help arrange financing on behalf of buyers.

Term: Mortgage Pre-Approval

An initial assessment by a lender or mortgage broker indicating how much a buyer may be able to borrow, subject to conditions. A pre-approval helps buyers understand their price range and strengthens an offer when purchasing a home.

Learn More about Pre-Approval →

Term: Refinancing

The process of replacing an existing mortgage with a new one, often to access equity, secure a different interest rate, or adjust loan terms. Refinancing may involve fees or penalties, depending on the mortgage.

Learn more about refinancing →

Term: Stress Test

A federal requirement that ensures borrowers can afford their mortgage payments if interest rates rise. Buyers must qualify at a higher rate than their actual mortgage rate to meet this requirement.