Read about collateral charge mortgages.
When a house is mortgaged, it’s used as security for a loan. This security is registered with a land registry office and is commonly known as a “charge”. This charge gives the lender the legal right to claim the registered house if the loan is in default. There are two types of charges that can be registered by a lender; Conventional (or Standard) and Collateral. At Tangerine, our Mortgages are registered as a Collateral Charge.
How is a Collateral Charge at Tangerine different from Conventional Charge?
Collateral Charge Mortgage
Registered for 100% of the property value
The specific details of the mortgage loan are not included in the charge that is registered on title against your house. A separate credit agreement contains the specific terms of the mortgage loan, such as the amount, interest rate and payments.
Creates room for future borrowing up to the charge amount without incurring legal costs*
Option to add a Home Equity Line Of Credit under current charge without incurring legal costs*
Transferring to another lender would involve refinancing through a lawyer with legal costs
Conventional Charge Mortgage
Registered for the loan amount
The specific details of the mortgage loan such as the amount, interest rate and payments are included in the charge registered against your house.
Future borrowing would involve refinancing through a lawyer with legal costs
Adding a Home Equity Line Of Credit would involve refinancing through a lawyer with legal costs
Can be transferred to another lender without incurring legal costs if the other lender agrees
To learn more about mortgage security, visit the Canadian Bankers Association
*Subject to application approval under current Tangerine credit criteria.