There are basically two ways that a mortgage can be registered against your property.   Either as a Standard Charge or a Collateral Mortgage.  Let’s review these options

A Standard Charge mortgage is registered with the land title or registry office in your municipality and it is registered for the amount of your mortgage.  If you have a mortgage for $310,000.00 it is registered as $310,000.00.  This charge can be transferred for a nominal fee if you would like to move it to another lender and often the lender who will be receiving the mortgage will pick up the costs.

A Collateral Mortgage is resisted under Personal Property Security Act and can only be registered or discharged on a property and cannot be transferred.  The amount that is registered can be up to 125% of the purchase price or value….. yes purchase price not mortgage amount, of your home.  For example if the purchase price or appraised value is $5000,000.00, the amount that can be registered is $625,000.00.  So why would a lender register as a collateral mortgage?  What are the benefits? Well the idea is that if you require more money one day, then one would save the legal cost of registration fees.  TD Bank registers all their mortgages as Collateral Charges and often if you have an all in one credit line and mortgage this too is registered as Collateral Charge.

The question you need to ask is:  Does it make sense for the bank to own the equity in my home?

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