(NC) If you're shopping for a mortgage, it's important to think about the long-term implications of the contract you're signing. One little-understood aspect of a mortgage contract is how the mortgage security will be registered.

Ask each lender you contact whether they will register the mortgage security with a standard or a collateral charge. The charge gives your financial institution the right to sell your home if the loan is not repaid as agreed.

Investigate your options to find one best suited to your needs.

Standard charge vs collateral charge

With a standard charge, the specific details of the mortgage loan (e.g., the amount, term and interest rate) are included in the charge registered on the title to the property. A standard charge is registered for the actual amount of the mortgage loan.

With a collateral charge, the specific details of the mortgage loan might not be included in the charge, and it can be used to secure multiple loans with your lender, including a mortgage and...

(NC) Thinking of breaking your current mortgage before the end of its term to take advantage of lower interest rates elsewhere?

Many Canadians believe their current lender can only charge three months' interest—usually just a few thousand dollars—to break an existing mortgage.

That's not necessarily the case, and far too many homeowners who have broken their mortgage contracts have been shocked by penalties amounting to tens of thousands of dollars.

“All homeowners want the best mortgage interest rate available, so switching lenders to improve your rate can be very attractive,” says Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada. “But proceed with caution before you switch lenders.”

“It's important to recognize that a mortgage is a binding contract. If you want out of one mortgage to switch to another, the penalties and fees for doing so could drastically reduce (in some instances) the financial benefit of the new rate. You...