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Frequently Asked Questions


Accelerated bi-weekly payment

A payment frequency that allows you to pay half the monthly payment every two weeks. Since there are 52 weeks in a year, you will make 26 payments a year (52 ÷ 2). To calculate the amount of your accelerated biweekly payments, divide your monthly payment by two (for example, $1,000 ÷ 2 = $500). You make the equivalent of one extra monthly payment per year, which means you will pay off your mortgage faster and save in interest charges.

   

Accelerated weekly payment

A payment frequency that allows you to pay one quarter of the monthly payment every week. To calculate the amount of your accelerated weekly payments, divide your monthly payment by four (for example, $1,000 ÷ 4 = $250). You make the equivalent of one extra monthly payment per year, which means you will pay off your mortgage faster and save in interest charges.

 

Amortization period

The period of time it will take to pay off a mortgage in full. The most common amortization period for a new mortgage is 25 years. Not to be confused with the term of the mortgage.

Annual Interest Rate
T
he annual interest rate charged on transactions when you don't pay your balance in full. Credit card issuers can charge different interest rates for different types of transactions, such as balance transfers, cash advances and purchases.

Annuity

A type of investment contract that pays you income at regular intervals, usually after retirement.

Asset

Any thing of value owned by an individual or organization.

Automated banking machine (ABM)
An electronic kiosk or terminal that allows you to conduct financial transactions such as paying bills, withdrawing cash and depositing cheques. Also called an automatic teller machine (ATM).

Automatic teller machine (ATM)

See automated banking machine.

Bank

A federally regulated financial institution that, in general, engages in the business of taking deposits, lending and providing other financial services.

Bank Act

Federal legislation governing the structure and operation of banks in Canada.

Bank of Canada

Canada's central bank. It is responsible for Canadian monetary policy, issuing bank notes, regulating and supporting Canada's principal systems for clearing and settling payments, and acting as fiscal agent for federal government debt.

Bank rate

The minimum lending rate of the Bank of Canada. It is applied to advances to institutions that are members of the Canadian Payments Association, and to purchase and resale transactions with key investment dealers in the money market. It is also the primary indicator of Bank of Canada monetary policy. The bank rate is an important tool because it is seen as the trend-setter for other short-term interest rates. Changes in the bank rate often lead to changes in the prime rate, which is the rate of interest that commercial banks charge their lowest-risk customers. Other rates can be affected, including those for mortgages, cars and business loans, as well as rates paid to savers on deposits and investment certificates.

Blended rate

An interest rate, applied to a refinanced loan that is a combination of the interest rate of the old mortgage and the interest rate for the additional amount to be borrowed.

Bond

A certificate received for a loan made to a company or government. In return, the issuer of the bond promises to pay the lender interest at a set rate and to repay the loan on a set date.

Canada Deposit Insurance Corporation (CDIC)

A federal Crown corporation established in 1967 to protect Canadian currency deposits against the possible failure of member financial institutions (which include banks, and trust and loan companies). As a general rule, eligible deposits are protected up to a maximum of $100,000 per person, including principal and interest, at each member institution.

Canada Mortgage and Housing Corporation (CMHC)

Crown corporation that administers the National Housing Act for the federal government, and creates and sells mortgage default insurance products.

Canada Premium Bond

A new savings product for individual Canadians, introduced by the Government of Canada in 1998. It offers a higher interest rate than the Canada Savings Bond, and is redeemable once a year on the anniversary of the issue date or during the 30 days thereafter without penalty.

Canada Savings Bond (CSB)

A savings product issued and guaranteed by the federal government, and offered for sale by most Canadian financial institutions to individual Canadians. It pays a competitive rate of interest that is guaranteed for one or more years. It may be cashed at any time and, after the first three months, pays interest up to the end of the month prior to encashment

Canadian Bankers Association (CBA)

Established in 1891, the CBA is the main representative body for banks in Canada. It provides its members — the chartered banks of Canada — with information, research, advocacy and operational support services. The CBA also provides information to the public on banking and financial issues.

Canadian Payments Association (CPA)

A financial network established in 1980 to operate a national clearing and settlement system.

Capital gain or loss

The profit or loss that results from the sale of an asset, such as a security or real estate.

Cash advance

Cash obtained from an ABM or at a teller, charged to your credit card(s). A cash advance is a loan, and the amount you borrow may be subject to daily limits. There is no interest-free period, so interest is charged from the day you withdraw the funds until the day you repay the amount of the advance in full. It is therefore an expensive way to obtain cash.

Cash-like transactions

Transactions that are treated like cash advances. As with cash advances, there is no interest-free period, so interest is charged from the day the transaction is made. Cash-like transactions include: wire transfers, money orders, travellers' cheques and gaming transactions such as buying lottery tickets, casino gaming chips, and betting.

Cash back

An optional feature that pays you a percentage of your mortgage in cash right away, in some cases in return for a higher interest rate than you would have paid without that feature. This can help you pay for things you'll need when getting a new home, such as legal fees or even furniture.

Charge card

A plastic card that allows the holder to make purchases at participating retailers with borrowed funds.

Cheque

A written order for payment of a certain amount of money.

Cheque cashing outlet

A business that provides cheque cashing and basic financial services, such as foreign currency exchange, money transfers and money orders.

Closing costs

Costs in addition to the purchase price of the home, such as appraisal fees, legal fees or prepaid property taxes. These costs must be paid before you take possession of your home. They range from 1.5% to 4% of a home's selling price.

Closed mortgage

A mortgage agreement that cannot be prepaid or changed before the end of the term. Your lender may let you make certain prepayments without penalty, but you will usually have to pay a penalty to break your mortgage agreement.

Code of conduct

Non-legislated guidelines that one or more organizations agree to follow. Also referred to as voluntary code or code of practice, it typically outlines service standards that you can expect in dealings with a company subscribing to the code.

Common shares

An investment that gives the holder part ownership in a company and the right to vote on major decisions affecting it.

Consumer price index (CPI)

Measure of price changes, produced by Statistics Canada on a monthly basis. It measures the retail prices of a shopping basket of about 300 goods and services, including food, housing, transportation, clothing and recreation.

Consumer provisions

Certain sections of various federal acts and regulations relating to financial institutions (e.g., the Bank Act, the Insurance Companies Act) are designated as “consumer provisions” by the Financial Consumer Agency of Canada Act. They are designed to protect consumers in their everyday dealings with financial institutions. The FCAC monitors federally regulated financial institutions to ensure they adhere to the consumer provisions that apply to them.

Conventional mortgage (also referred to as low-ratio mortgage)

A mortgage loan of up to a maximum of 80% of the purchase price of a home. You must get mortgage default insurance if your mortgage exceeds that limit.

Convenience cheque

A cheque provided by the credit card issuer that results in a charge to your credit card. When you use a convenience cheque, the transaction is treated as a cash advance. There is no interest-free period, and you're charged interest until you pay back the amount of the cheque in full. It is therefore an expensive way to pay.

Convenience fee

A fee for withdrawing money from an ABM that does not belong to your credit card issuer.

Convertible rate

A mortgage feature that allows you to change your interest rate mortgage to another interest rate mortgage at any time with no penalty.

Co-operative credit association

An association that is organized and operated on co-operative principles, with one of its principal purposes being to provide financial services to its members.

Co-operative Credit Associations Act

Federal legislation governing the structure and operation of co-operative credit associations in Canada.

Credit card

A plastic payment card that allows the holder to obtain goods and services on credit terms and without the requirement to pay cash. A credit card may also be used to obtain cash.

Credit card balance

The amount of money you owe your credit card issuer.

Credit rating

A rating created by authorized credit agencies that denotes a person's credit history.

Credit report

A snapshot of your credit history and one of the main tools lenders use to decide whether or not to give you credit. You can request a copy of your credit report from the two credit-reporting agencies, Equifax and TransUnion.

Credit score

A numeric rating that is a reflection of your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers. The credit-reporting agencies, Equifax and TransUnion, use a scale from 300 to 900. Lenders may also have their own ways of arriving at credit scores. Credit score is sometimes also called credit rate.

Credit union

A co-operative financial institution that is owned by its members and operates for their benefit. Credit unions and caisses populaires (a form of credit union located primarily in Quebec) are subject to provincial regulation and are usually small and locally oriented.

Debit card

A plastic card that, when used in conjunction with a personal identification number (PIN), allows you to electronically access your bank accounts from automated banking machines or at retailers offering the Interac Direct Payment service.

Deposit
Money put into an account at a financial institution, such as a bank. The deposit may be in the form of cash, cheque or electronic transaction.


Deposit account
An account in which money is deposited. Examples include chequing and savings accounts.

Deposit insurance

Certain types of deposits with a financial institution are insured up to a maximum amount, in the event that the financial institution fails (i.e., goes bankrupt).

Deposit-taking institution

A bank, trust company, credit union / caisse populaire or other financial institution that accepts deposits from the public and provides regular banking services, such as chequing and savings accounts.

Dividend

A portion of a company's profit paid to shareholders.

Down payment

The amount of money you deposit when you first buy your home. It must be at least 5% of the purchase price, but can be more. The down payment will help determine how much you need as a mortgage loan, and whether or not you will have to pay mortgage default insurance, which is required if you have a down payment of less than 20% of the purchase price.

Electronic commerce (E-commerce)

Conducting business communications and transactions over networks and through computers. Electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital communications. It also includes buying and selling over the Internet, electronic fund transfers, smart cards, digital cash and all other ways of doing business over digital networks.

Estate planning

The process of arranging one's personal affairs to provide for death or mental incapacity.

Federally regulated financial institution

A financial institution regulated by the federal government. It has been created or allowed to offer financial services in Canada pursuant to one of the financial institution statutes established by the federal government (the Bank Act, the Insurance Companies Act, etc.). Federally regulated institutions (also called federal financial institutions) consist of all banks and all federally incorporated or registered insurance, trust and loan companies and co-operative credit associations.

Financial institution

A commercial or investment bank, trust company, brokerage house, insurance company, or other institution that participates in financial transactions involving cash or financial products. The primary role of such an institution is to facilitate the financing of investments, from home mortgages to the raising of funds via the issue of debt or equity for mega-projects. It may also provide insurance, take on fiduciary responsibilities, store cash and securities for safekeeping, etc.

Financial service charge

A fee charged by a financial institution for using its services — for instance, for making bill payments, writing cheques or using automated banking machines. Fees vary depending on the service and the financial institution used. Under per transaction fee plans, you pay as you go for each transaction; under flat fee plans, you pay a set price each month for a certain number of transactions. Companies set their own service charges but federally regulated institutions must advise clients when they plan to increase or introduce new fees.

Fixed interest rate mortgage

A mortgage loan where the interest rate and payment amount do not change for a specific term.

Foreign bank branches

Legislation permits a foreign bank to operate in Canada through branches rather than subsidiaries, and to focus on commercial banking and broader lending activities. Foreign bank branches are permitted to take only deposits of $150,000 and over, which are defined as retail deposits.

Foreign exchange

Various instruments used to settle payments for transactions between individuals or organizations using different currencies (e.g., notes, cheques, etc.).

Gross debt service (GDS) ratio

The percentage of your gross income (before deductions such as income tax) required to cover the costs associated with your home, such as mortgage payments, property taxes and heating. As a general rule of thumb, the GDS ratio should not exceed 32% of your gross income.

Guaranteed investment certificate (GIC)

An investment that offers a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years.

High ratio mortgage

A mortgage for more than 80% of the purchase price of the home. For a high ratio mortgage, mortgage default insurance is required.

Holding company

A company that has control over other companies through ownership of a sufficient proportion of those companies' common stock.

Home Buyers' Plan (HBP)

A federal government program that allows first-time homebuyers to withdraw money from their Registered Retirement Savings Plans (RRSP) tax-free to make their down payment or other closing costs. The HBP is administered by the Canada Revenue Agency.

Home equity

The difference between the value of your home and the unpaid balance of your mortgage. Your home equity increases with time as you pay your mortgage down and/or as the value of your home increases.

Home equity line of credit (also referred to as secured loan or collateral mortgage)

Is a loan where property is used as security for the loan or line of credit? These funds can be used for any purpose. For example the consumer could use the secured line of credit to purchase a car.

Index

A statistical measure of the state of the stock market or economy. There are indexes that measure changes in the prices of consumer goods and services and others that measure the value of groups of stocks or bonds (e.g., stock market index).

Index-linked deposit (ILD)

A term deposit that pays a rate of return based on the performance of one or more financial indicators such as the level of a stock market index (e.g., Toronto Stock Exchange [TSX] 60 or 35) over the term of the deposit. It differs from a savings product that pays a fixed rate of interest and assures a guaranteed return on the investment, such as a traditional GIC or term deposit. With an ILD, the original deposit is guaranteed but any return is not. An example is a market-linked GIC: if the stock market rises over the term of the investment, the investor benefits from the rise up to a maximum return. If there is no rise in the stock market, the original deposit remains fully protected but the investor will receive no return (i.e., no interest is payable).

In good standing

The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a percentage increase in the consumer price index.

Inflation

The fact that payments on a credit account are up-to-date — in other words, the cardholder has made at least the minimum payment has rarely missed payments and is not over the credit limit.

Interac Association

National organization of financial institutions and technology service providers, allowing Canadians convenient access to their deposit accounts through the shared network of automated banking machines and Interac Direct Payment, the debit card service.

Interac Direct Payment

A means of paying for goods and services with a debit card that authorizes transfer of the funds, via the Interac Direct Payment network, directly from the purchaser's account to the merchant's account.

Interest

The amount paid by a borrower to a lender for the use of the money.

Interest-free grace period

A number of days during which no interest is charged on the transaction. By law, all federally regulated financial institutions that issue credit cards must provide a minimum 21-day interest-free grace period on all new credit card purchases, as long as the balance is paid in full by the credit card statement's due date. Check the information box at the beginning of your credit card agreement to determine the length of the grace period for your credit card, or see FCAC's Credit Card Comparison tables. NOTE: There is no interest-free grace period for cash advances, cash-like transactions or balance transfers.

Interest rate

The percentage used to calculate the interest to be paid.

Interest rate cap

A maximum interest rate that can be charged on a variable interest rate mortgage, regardless of any increase in market interest rates.

Introductory rate

A special interest rate on credit card balances that some issuers offer for a specific period of time, usually from a few months to a year. Many credit card issuers offer low introductory rates to attract new cardholders.

Investment

Money put into a form that earns a return or profit. In essence, the money is being used to make money.

Investment dealer

A firm that trades securities for its clients and offers other investment services. Also known as a securities dealer or brokerage house.

Investment Dealers Association (IDA)

Formed in 1916, the IDA is the national self-regulatory organization of the securities industry. It monitors and regulates the activities of investment dealers, and promotes the interests of the securities industry.

Investment income

The income received from investment in securities and property. It includes rent from property, dividends from shares in corporations, and interest from bonds, guaranteed investment certificates, bank accounts, certificates of deposit, Treasury bills and other financial securities.

Joint venture

A project undertaken by two or more parties to achieve a mutual objective.

Lease

An agreement to rent for a period of time at an agreed price.

Lender

An institution or person who lends money to people or companies. The lender will set the interest rate and the terms of the loan.

Liable

In the context of credit cards, legally responsible for repaying the credit card balance.

Line of credit

A type of loan in which a borrower draws down funds as needed, up to a specified maximum.

Liquidity

The ease with which assets or investments can be converted into cash — that is, made "liquid." Liquid investments include savings accounts, Canada Savings Bonds, Treasury bills and money market mutual funds. In contrast, a home is not considered a liquid investment because it cannot be easily transformed into cash.

Loan company

A financial institution that operates under either provincial or federal legislation and conducts lending activities similar to those of a bank.

Locked-in Registered Retirement Savings Plan

A Registered Retirement Savings Plan set up to receive funds transferred from a registered pension plan on the condition that it is used solely for retirement income purposes. The pension monies are usually locked in (unless otherwise permitted by the legislation of the province in which the employer is registered). A locked-in RRSP can also be an investment bought through a financial institution, with the monies locked in for a specific period as agreed by both parties (the financial institution and the client) at the time of the purchase.

Low-fee account

Eight banks in Canada have each signed a memorandum of understanding (MOU) with the federal government, agreeing to offer a standard low-fee account to their customers. The names and features of the accounts differ by bank, but the accounts all meet certain standards, including: a low monthly fee; the availability of some in-branch transactions; no charge for deposits; and a free monthly statement or passbook. Negotiating MOUs with the banks is an approach the government has taken to ensure that Canadians have access to an account at an affordable price. The eight banks are the Bank of Montreal, Royal Bank of Canada, National Bank of Canada, HSBC Bank Canada, Laurentian Bank of Canada, Canadian Imperial Bank of Commerce, Bank of Nova Scotia and TD Canada Trust.

Maturity

The time at which a loan, insurance policy or annuity reaches the end of its span.

Merger

The joining together of two companies to form one entity.

Micro-credit

The allocation of small loans, usually under $5,000, to individuals to allow them to sustain self-employment or start up small businesses.

Minimum payment

The minimum amount your credit card issuer requires you to pay on the outstanding credit card balance.

Missed payment interest rate

The interest rate charged on outstanding balances if, for example, you miss more than one payment in a row. The missed payment interest rate is usually two to six percentage points higher than your normal interest rate on outstanding balances, depending on the credit card issuer.

Monetary policy

The process of managing the supply of money and credit to contribute to economic performance. The Bank of Canada manages Canadian monetary policy mainly through its influence on short-term interest rates, though it is ultimately answerable to the federal government for its actions. The Bank influences short-term interest rates by adjusting its own bank rate. A rise in the bank rate "tightens" the supply of money and credit, at once restraining elements in the economy that contribute to inflation and elements that contribute to economic performance. A lowering of the bank rate does the reverse. The bank rate and the money supply influence interest rates and the exchange rate of the Canadian dollar, and determine the monetary conditions under which the Canadian economy operates.

Monoline

A financial company that specializes in a single line of products, such as credit cards, mortgages or home equity loans, and that may use direct marketing practices and statistical models to target specific customers. In many cases, monolines have no expensive overheads from large branch networks and have low-cost financing open to them by securitizing their loans on the capital markets. These features make such companies highly competitive.

Mortgage

A loan (usually for buying a property) in which the lender can take possession of the property if the loan is not repaid on time. Payments include the principal and the interest; they may also include a portion of the property taxes.

Mortgage default insurance

Insurance that protects the mortgage lender if you cannot make your mortgage payments. It is required by law if your down payment is less than 20%. This should not be confused with mortgage life insurance or home, property, fire and casualty insurance, which typically protect the home owner.

Mortgage broker

A person or organization that offers the mortgage products of different lenders.

Mortgage

A loan with a property pledged to guarantee repayment.

Mortgage Life Insurance

Mortgage Life Insurance guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

Mortgage broker

An independent contractor who offers the loan products of different lenders. A mortgage broker is an agent for lenders in much the same way that an insurance broker is an agent for insurance companies. Mortgage brokers act as agents for banks, trust companies, credit unions, mortgage corporations, finance companies and individual private investors. Some mortgage brokers are exclusively lenders of their own money and provide a direct source of mortgage funds.

Open mortgage

A mortgage that can be prepaid at any time during the term, without penalty. The interest rate on an open mortgage may be higher than on a closed mortgage with an equivalent term.

Ownership rules

Federal rules and restrictions governing the ownership of financial institutions. For example, the Bank Act prohibits control of any large financial institution by any single shareholder or group of shareholders. Large banks (those with equity greater than $5 billion) must be widely held — that is, no one investor can own more than 20% of any class of voting shares or 30% of non-voting shares.

Payments system

An electronic clearing and settlement system that enables cheques and other methods of payment to be used in transactions throughout the economy. This financial network includes the cheque payment system, the Visa and MasterCard credit card systems, the automated banking machine and debit card networks of Interac, and the separate clearing systems for debt and equities and for mutual funds. One part of the financial network was established in 1980 under the Canadian Payments Association Act to operate a national clearing and settlement system.

Personal identification number (PIN)

A secret code intended for the sole use of its user. For example, the PIN is used in conjunction with a debit card to confirm the identity of the cardholder and to authorize debit card transactions.

Policyholder

An individual or organization with an insurance policy. Pre-authorized debit A withdrawal from an account made by a company with the written authority of the account holder. A convenient substitute for issuing cheques to pay the same bill every week or month.

Posted rate

The interest rate advertised or shown by a financial institution. Usually, financial institutions advertise their mortgage interest rates without any discounts. You may be able to negotiate a lower interest rate before you sign your mortgage agreement.

Premium (insurance)

Payment made at fixed intervals for an insurance policy.

Prepayment

Payment of an additional portion or all of the principal balance before the end of your term. Lenders may charge fees when you use a prepayment option under a closed mortgage agreement.

Prepayment penalty

A fee charged to you by the lender for making a prepayment greater than the amount allowed in your mortgage agreement, or for paying off a closed mortgage before the end of the term.

Primary cardholder

The person who applied for the card and whose name is on the credit agreement.

Prime rate

The interest rate a financial institution charges on loans to its best customers.

Principal

The amount of money that you borrowed from a lender to pay for your home.

Reference rate

A base rate, such as the prime rate, used in the calculation of variable credit card interest rates.

Renegotiating

The process of changing the conditions of your mortgage, loan or other contract before the end of your term.

Renewal/renewing

The process of extending the loan at the end of your term with the same or with a new lender. You can change your mortgage terms and conditions at this time.

Retail branch

A location where banking services are provided to individuals.

Reverse mortgage

Unlike an ordinary mortgage, which involves payments by the borrower to the lender, a reverse mortgage involves payments by the lender to the borrower. It is an arrangement whereby homeowners get cash (usually in the form of monthly payments or a lump sum) in return for a mortgage on their home, which is used as security against the loan. This is a strategy sometimes used by retired homeowners who need to supplement their income. A reverse mortgage is one way of tapping into the value of a home.

Risk

The potential of losing one's money or the uncertainty of future returns.

Second mortgage

An additional mortgage that is taken out on the same property while you continue to have a first mortgage. You continue to make the payment on the original mortgage as well as the payment on your second mortgage.

Secured credit card

A secured credit card is a card that requires you to pay the issuer a security deposit before you can use it. Your credit limit is normally set as a percentage of your deposit (usually 100 percent or more). For example, if you pay a security deposit of $500, you would normally get a credit limit of $500 or more.

Service charge/fee

Fees established by financial institutions for certain transactions.

Stock

Unit of ownership in a company, which is bought and sold on a stock exchange. The terms "share" and "stock" are often used interchangeably.

Stock exchange

The marketplace where stocks are traded. Examples are the Toronto Stock Exchange, the Montréal Exchange and the Canadian Venture Exchange.

Subsidiary

A company that is legally controlled by another company.

Term

The period of time your mortgage agreement will be in effect. At the end of the term, you either pay off the mortgage in full, renew it or possibly renegotiate your mortgage agreement (for example, decrease your amortization period). Terms are generally for six months to 10 years. Not to be confused with the amortization period.

Total debt service (TDS) ratio

The percentage of gross income (before deductions such as income tax) required to cover the costs associated with your home, such as mortgage payments, property taxes and heating, plus other debts, such as credit card payments, car payments or lines of credit. As a general rule of thumb, the TDS ratio should not exceed 40% of the home owner's gross income. Transaction
Generally, any use of your credit card or credit account, including purchases, payments, cash advances and cash-like transactions.

Treasury bill (T-bill)

A short-term, low-risk investment issued by a federal or provincial government. It is sold in denominations ranging from $1,000 to $1 million, with terms to maturity of one month to a year. The difference between the purchase price and the face amount represents the return to the investor.

Trust

An arrangement under which money or other property is held by one person or company (often a trust company) for the benefit of another person or persons. These assets are administered according to the terms of the trust agreement. Each province has a trustee act, which regulates the kinds of investments that can be made by the trustees of a trust fund.

Trust and Loan Companies Act

Federal legislation governing the structure and operation of federally incorporated or registered trust and loan companies in Canada.

Trust company

A financial institution that operates under either provincial or federal legislation, and conducts activities similar to those of a bank. However, because of its fiduciary role, a trust company can administer estates, trusts, pension plans and agency contracts, which banks cannot do directly.

Trustee services

Services associated with administering and managing a trust on behalf of a client. They can include the establishment of a trust, handling tax issues and distributing assets to the client's beneficiaries.

Variable interest rate mortgage

A mortgage with an interest rate that can vary during the term. The interest rate varies in line with changes in the market interest rates. The mortgage payments can be fixed, or they could change with interest rates, depending on the terms of the mortgage.

Widely held bank

A bank owned by many shareholders, with no individual owner holding sufficient shares to exercise control over the bank. Under the Bank Act, institutions with over $5 billion in equity and Schedule I banks must be widely held by the public, with no single shareholder owning more than 20% of any class of voting shares or 30% of any class of non-voting shares.

 
 

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