Canadian Mortgage Glossary: Terms That Change Decisions

Term is not amortization

The term is the period covered by your current mortgage contract. Amortization is the planned time to repay the loan. A 25-year amortization does not imply the rate is fixed for 25 years. At renewal, the rate and payment can change while an outstanding balance remains.

Default insurance is not your home insurance

Mortgage default insurance protects the lender, while property insurance covers risks under the homeowner’s policy. Life or disability creditor insurance is another separate product. If a premium is financed, it increases the principal used to calculate payments; taxes on the premium may be payable separately.

GDS, TDS and stress testing

GDS and TDS are qualification measures based on accepted income and specified costs. Your actual household budget also includes costs outside those formulas. OSFI’s uninsured minimum qualifying rate is generally the greater of the contract rate plus two percentage points or 5.25%, with scope and exceptions that should be confirmed for the actual transaction.

Your next useful steps

Ask whether a figure describes the term or amortization.Separate each kind of insurance.Keep the actual budget distinct from qualification.

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Keep personal identity, tax and banking documents in your lender’s verified secure process.

A question worth asking

Is a variable rate the same as an adjustable payment?

Contract structures differ. Ask whether the payment changes, how interest is applied and what happens if rates rise.

Check the source

Primary references checked October 28, 2026. Rules and product availability can change; confirm the requirements for your actual transaction.