The Glossary
Plain-language definitions for the terms that come up when you buy a home in Calgary, grouped by where in the process you meet them. Alberta practice differs from what you will read on American sites, so the local version is the one written here.
Getting financed
Pre-qualification. A rough borrowing range based on what you tell a lender, with nothing verified. Useful for orientation only.
Pre-approval. A verified application with documents reviewed and credit pulled, usually carrying a rate hold. This is the one that carries weight when you write.
Stress test. The federal rule requiring lenders to qualify you at a rate above the one you are offered, so the approved amount lands below what a payment calculator alone would suggest.
Debt service ratios. The two percentages lenders use to size a mortgage. One measures housing costs against income, the other measures all debt payments against income.
Down payment. The cash you put in at purchase. The Canadian minimum runs on a sliding scale by price, and lenders verify where the money came from.
High-ratio mortgage. A mortgage with less than twenty percent down. It requires default insurance.
Conventional mortgage. A mortgage with twenty percent down or more. No default insurance required.
Mortgage default insurance. Insurance protecting the lender, paid for by the borrower, added to the mortgage rather than paid at closing. Available on properties priced up to $1.5 million.
Rate hold. A lender's commitment to hold a quoted rate for a set window while you shop.
The mortgage itself
Principal. The amount borrowed, before interest.
Amortization. The full length of time to pay the mortgage to zero, commonly twenty-five years. Longer lowers the payment and raises the total interest.
Term. The length of your current contract with the lender, commonly five years. At the end you renew, refinance, or move.
Fixed rate. A rate locked for the term. The payment does not move.
Variable rate. A rate that moves with the lender's prime rate. The payment or the split between principal and interest moves with it.
Open and closed. An open mortgage can be paid off at any time without penalty and prices that flexibility into the rate. A closed mortgage carries a lower rate and limits on early repayment.
Prepayment privileges. The extra payments a closed mortgage permits each year without penalty, usually a percentage of the original principal plus an increase to the regular payment.
Semi-annual compounding. The Canadian convention for fixed-rate mortgages, which is why a Canadian payment differs from what an American calculator returns on the same inputs.
Porting. Carrying an existing mortgage and its rate to a new property instead of breaking it.
Bridge financing. Short-term borrowing that covers the gap when your purchase closes before your sale does.
The purchase
Comparable sales. Recent sales of similar homes nearby, adjusted for differences. The evidence an offer price rests on.
Deposit. Money submitted with an accepted offer, held in the listing brokerage's trust account and credited against the price on possession.
Trust account. A regulated account a brokerage holds client money in, separate from its own funds.
Condition. A term that must be satisfied by a deadline for the contract to continue. Financing, inspection, and condominium document review are the common ones, with the sale of your existing home a fourth.
Waiver. The signed document removing a condition once you are satisfied.
Condominium documents. The package a condominium corporation provides on request, covering bylaws, finances, minutes, and insurance.
Reserve fund study. A periodic engineering review of a condominium's major components and the money set aside to replace them. Read it before you waive.
Estoppel certificate. A statement from the condominium corporation confirming amounts owing on a unit and any known claims against it.
Home inspection. A visual assessment of the property's systems and structure by an inspector you hire and pay directly.
Appraisal. A lender-ordered opinion of value confirming the property supports the mortgage.
Possession day. The day funds transfer, the transfer registers, and keys are released.
Title and closing
Title. The registered record of ownership. Alberta runs a Torrens system, which means the register itself is the proof rather than a chain of historical deeds.
Land Titles Office. The provincial registry where transfers and mortgages are registered, and where the registration fee is charged.
Real Property Report. A survey showing the location of structures on a lot, typically paired with a municipal stamp confirming compliance with bylaws.
Title insurance. A policy bought at closing covering survey, compliance, and title defect risks. Often used in place of an updated Real Property Report.
Encumbrance. Anything registered against title that limits it, such as a mortgage, an easement, a utility right of way, or a restrictive covenant.
Caveat. A notice registered on title claiming an interest in the property.
Adjustments. The calculation dividing prepaid property taxes and condominium fees between seller and buyer as of possession day.
Discharge. Removing a paid-off mortgage from title.
For your numbers, talk to a mortgage professional. This list grows from what people ask. If you run into a term that is not here, send it over.