Standard or Collateral Charge Mortgage. What’s best for you?

Joel Olson • January 2, 2024

When arranging mortgage financing, your mortgage lender will register your mortgage in one of two ways. Either with a standard charge mortgage or a collateral charge mortgage. Let’s look at the differences between the two.


Standard charge mortgage


This is your good old-fashioned mortgage. A standard charge mortgage is the mortgage you most likely think about when you consider mortgage financing. Here, the amount you borrow from the lender is the amount that is registered against the title to protect the lender if you default on your mortgage.


When your mortgage term is up, you can either renew your existing mortgage or, if it makes more financial sense, you can switch your mortgage to another lender. As long as you aren’t changing any of the fine print, the new lender will usually cover the cost of the switch.


A standard charge mortgage has set terms and is non-advanceable. This means that if you need to borrow more money, you'll need to reapply and requalify for a new mortgage. So there will be costs associated with breaking your existing mortgage and costs to register a new one.


Collateral charge mortgage


A collateral charge mortgage is a mortgage that can have multiple parts, usually with a re-advanceable component. It can include many different financing options like a personal loan or line of credit. Your mortgage is registered against the title in a way that should you need to borrow more money down the line; you can do so fairly easily.


A home equity line of credit is a good example of a collateral charge mortgage.


Unlike a standard charge mortgage, here, your lender will register a higher amount than what you actually borrow. This could be for the property's full value, or some lenders will go up to 125% of your property's value. 


In the future, if the value of your property appreciates, with a collateral charge mortgage, you don't have to rewrite your existing mortgage to borrow more money (assuming you qualify). This will save you from any costs associated with breaking your existing mortgage and registering a new one. 


However, if you’re looking to switch your mortgage to another lender at the end of your term, you might be forced to discharge your mortgage and incur legal fees. Also, by registering your mortgage with a collateral charge, you potentially limit your ability to secure a second mortgage.


So what’s a better option for you?


Well, there are benefits and drawbacks to both. Finding the best option for you really depends on your financial situation and what you believe gives you the most flexibility. This is probably a question better handled in a conversation rather than in an article.


With that said, undoubtedly, the best option is to work with an independent mortgage professional. It’s our job to understand the intricacies of mortgage financing, listen to and assess your needs, and recommend the best mortgage to meet your needs. As we work with many lenders, we can provide you with options. Don’t get stuck dealing with a single institution that may only offer you a collateral charge mortgage when what you need is a standard charge mortgage. 


So if you’d like to have a conversation about mortgage financing, please get in touch. It would be a pleasure to work with you and answer any questions you might have. 

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Joel Olson
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Worried About Your Mortgage Renewal? You’re Not Alone

By Joel Olson • June 18, 2025
Worried About Your Mortgage Renewal? You’re Not Alone  If your mortgage renewal is coming up soon, you're likely feeling a bit of financial pressure—and you’re not the only one. A recent survey shows that over half of Canadian homeowners believe their upcoming mortgage renewal could impact their current living situation. With interest rates still higher than what many borrowers locked in before 2022, 45% of those renewing in the next 12 months expect their monthly payments to increase. Even though the Bank of Canada has held its key overnight rate steady at 2.75%, borrowing costs remain elevated compared to the low-rate years we saw earlier in the decade. And that’s changing how Canadians think about their finances. Changing Plans and Tightening Budgets Among those worried about their renewal, 73% say they’re already cutting back on discretionary spending—things like eating out, entertainment, or travel—to brace for higher mortgage payments. For many, it goes deeper than just trimming the budget. Nearly one in four surveyed homeowners said they’re rethinking their entire financial strategy. Some are pressing pause on home renovations (43%), while others are considering downsizing or relocating to a more affordable area (29%). A smaller group (15%) is even open to major lifestyle changes, like moving in with roommates or relocating to a new neighbourhood altogether. Fixed-Rate Mortgages on the Rise In this climate, most homeowners looking to renew are leaning toward fixed-rate mortgages, with 75% preferring the stability of predictable payments. For those facing uncertainty, locking in a rate for the next few years can offer peace of mind—even if it means paying a little more in the short term. First-Time Buyers Are Feeling It Too It’s not just current homeowners feeling the pinch. A separate survey found that more than half of Canadians planning to buy a home are cutting back on non-essential spending to save for their down payment or other buying costs. About 31% are even considering tapping into savings or investment accounts like TFSAs, RRSPs, or first-time home savings accounts to make their purchase possible. What This Means for You Whether you’re preparing to renew or purchase for the first time, this environment calls for smart, strategic planning. You’re not alone in feeling uncertain—but with the right guidance, you can navigate these changes confidently. Have questions about your upcoming renewal or wondering what type of mortgage is right for today’s market? Let’s connect. We're here to help you make informed, confident decisions about your home financing.
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How to Save Money for a Downpayment

By Joel Olson • June 17, 2025
Whether you want to set aside money to buy a car or take a vacation, save up for a down payment on a property, or plan for your retirement, the principles are the same. However, as you’re reading this article on a website dedicated to helping you secure mortgage financing, we’ll assume you want tips on how to save for a down payment! The key to saving money is getting clarity - clarity around your income and your expenses, developing and following a clear plan, and seeking help from professionals who can help you see the big picture as well as the details. Although this might seem fundamental, sometimes going back to basics is the best place to start. Assess your income. If your goal is to save money, you’ll need to identify just how much money you’ve got to work with! The best way to do this is to write everything down. This could be with paper and a pen or on a spreadsheet; whichever way works best for you is fine. The goal is to have all your income in front of you! If you’re on a fixed income or receive a salary for work, your calculations might be pretty simple. Use the income you actually take home, not your gross income. Include an average of your variable income sources like tips, overtime, bonuses, or shift differentials. You should also include other income sources like an annual tax return, and child tax or other government benefits. Spend time to make an exhaustive list of all your income sources. Track your expenses. Once you’ve identified what you have to work with on the income side, the next step is to figure out just how much you actually spend to maintain your current lifestyle. Start by identifying regular bills, then look at your discretionary spending. If you have a budget already in place, you should be able to identify these numbers easily. If not, you can expect that getting clarity around your expenses will be very enlightening. It will be helpful to look through a few months’ worth of bank statements to see just how much money you actually spend. Information is the key to finding clarity. The more information you have, the more equipped you will be to save money. Just like your income, write down all your expenses. This will allow you to assess and reprioritize where you spend your money. Develop and follow a plan. Once you have a clear picture of your income and expenses, you need to figure out how to make more money than you spend. Although that sounds so simple, it really isn’t. The majority of Canadians incur debt because they spend more money than they make. This is why saving money can be so hard. But if we’re going back to basics, remember this: if you’re spending more money than you're making, you need to either increase your income or decrease your expenses to start saving money. There are countless money-saving strategies on the internet; consider following a few financial bloggers, and have fun learning about what works best for you! Seek help from professionals. You’re probably here to learn about how to save money for a down payment because you want to buy a home soon. If that's the case, be assured you're in the right place. Putting together a plan to secure mortgage financing is one plan you don't have to make on your own. As independent mortgage professionals, it’s our job to help you navigate all aspects of mortgage financing. Just like saving for a down payment is about managing income and expenses, so is getting a mortgage. Income and expenses, along with credit and property, are what a lender looks at when assessing your suitability for a mortgage. So while you might assume that putting together a plan to save for a down payment is where you should start, it might not actually be the best place to start. Saving money takes time, and while you're doing that, there are many other things you could be doing at the same time, like building credit to increase your chances of qualifying for a mortgage sooner. When you’re ready to assess your financial situation and put together a plan to save for a down payment and get into a mortgage sooner, please get in touch. It would be a pleasure to work with you.