Getting a mortgage: know your rights

When you get a mortgage with a federally regulated financial institution (lender), they must disclose to you certain information. Depending on the type of mortgage you get, the information may vary. They must do so in a manner, and using language, that is clear, simple and not misleading.

Before you sign a mortgage agreement, take the time to read and understand the terms and conditions. Ask questions if anything is unclear or if you’re not sure about what you’re signing.

Your right to information when you apply for a mortgage

Your lender must disclose information in the mortgage application, in the mortgage agreement, or in a separate document. They must disclose the most important information to you in a disclosure statement and in an information box:

• if the disclosure statement is in the agreement, they must set it out in a consolidated manner in a single location. The information box must be set out at the beginning of the agreement
• if the disclosure statement is in an application form, they must disclose the information by presenting it in a single prominently displayed information box
• if the disclosure statement is in a separate document, they must set out the information box at the beginning of the statement

Information box for fixed rate mortgages

Your lender must provide information such as the:

• principal: the amount that you’re borrowing
• advance(s): the date on which your funds will be advanced and the date they’ll start charging interest
• payments: amount of each payment, its due date and frequency, and a brief description of its elements
• term:
  • length of time: number of months or years of your term
  • mortgage type: whether it’s open or closed
  • brief explanation of what open or closed means
• amortization period: number of month or years if it’s different from the term of the loan
• annual interest rate: interest rate they’re charging on your mortgage and how the interest is compounded (if applicable)
• annual percentage rate (APR): annual cost, expressed as a percentage of the amount you’re borrowing if different from the annual interest rate
• prepayment privileges: amount you can pay on top of your regular payments without having to pay a prepayment penalty. This also includes when and how many times you can make prepayments without penalty
• penalty charges: amount of the penalty charges, if any, if you prepay your loan before the end of the term. They must also provide a brief explanation of how they’ll calculate them
• mortgage default insurance cost: amount of insurance charges for default. This insurance protects the mortgage lender if you don’t make your mortgage payments
• other charges: types and amounts of any other charges that might apply other than interest charges. This could be a discharge fee, default charge or insufficient funds fee

See an example of an information box for a fixed rate mortgage agreement.

Additional information on fixed rate mortgages

In addition to the information box, your lender must disclose information such as:

• the total amount of all your payments at the end of the term
• the amount that represents the cost of borrowing over the term of your mortgage. For example administrative charges, service charges and charges for a broker, appraisal, or inspection
• the fact that they’ll apply your payments to the interest and other charges first and then to the principal
• information on any optional services you accepted for the mortgage, such as disability or life insurance. They must also tell you:
  • how much they cost
  • the conditions for cancelling these services if they didn’t provide this information already in a separate statement
• a description of the property you provided as security for the mortgage, if any
• the existence of a mortgage discharge fee and its amount on the day they provide this information

Information box for variable rate mortgages

The information box must include the same information your lender must disclose for a fixed rate mortgage, as listed above.

They must also provide:

• the annual interest rate that applies on the date of the initial disclosure statement
• a brief description of the method they used to calculate the annual interest rate
• the date the calculation was made

See an example of an information box for a variable rate mortgage agreement.

Additional information on variable rate mortgages

In addition to the information box, your lender must disclose information such as:

• the amount of each payment based on your interest rate at the date of signing, and when they are due
• the total amount of payments and interest (cost of borrowing) you’ll pay during the term
• if interest variations link to another rate, at least once a year, a statement with:
  • the interest rate and unpaid balance at the beginning and end of the period that the statement covers
  • each payment due for the upcoming period. They’ll base this on an estimate using the interest rate in effect on the date of the disclosure statement

For variable rate mortgages with fixed payments, they must also include the following in the agreement or disclosure document:

• the annual interest rate at which your mortgage payment wouldn’t cover the interest due for the period (trigger rate)
• the fact that the interest rate may increase during your term. In that case, the time it takes to pay your mortgage will be longer

Find out how mortgage interest rates work and how they may affect you.

Your right to information when your mortgage agreement changes

If your lender changes your original mortgage agreement, they must disclose details of these changes, in writing. They must disclose these details no later than 30 days after the date they make the change. They may disclose this information to you electronically if you consented to receive information this way.

Your right to information before you renew your mortgage

Your lender must disclose to you information about the renewal of your mortgage at least 21 days before the end of your term. The information must contain the same information as when you apply for a new mortgage. They may combine it with your mortgage renewal agreement.

They must also notify you at least 21 days before the end of your term if they won’t renew your mortgage.

You don’t have to renew your mortgage with the same lender. You can move your mortgage to another one if their terms and conditions are better for you.

Find tips about renewing your mortgage.

When these rights apply to you

These rights apply when you’re dealing with a federally regulated financial institution like a bank or federal credit union.

Find out if your financial institution is federally regulated.

Learn more about how your banking rights are protected.

Related links

• Paying your mortgage when experiencing financial difficulties