Regardless of the payment type (blended or interest-only), amortization or structure (open v. closed) of the mortgage, these are the three (3) covenants your lender is making when providing you with a mortgage:

  1. Certificate of Discharge:after the mortgagee (lender) has received all the funds to repay all of the outstanding balance on a mortgage, the lender will provide to you – the borrower or mortgagor – a Certificate of Discharge.  This Certificate indicates that the amount you’ve borrowed has been repaid in full. It is now your responsibility (your lawyer’s) to have this certificate of discharge registered on title.  Or, if the mortgage is being refinanced by another lender, then the incoming lender will have their lawyer register the Certificate before they register the new mortgage charge against your property.
  2. Assignment of mortgage:you have the right to request that your lender assign your mortgage to a new lender, provided that your mortgage is in good standing and you have the right to redeem the mortgage. A “right to redeem” a mortgage, as defined in the Mortgages Act, is the right to pay off the mortgage in full. Per the Act, all mortgage automatically have this right after 7 years. This means that, if you have a 6-year term mortgage, then the mortgage becomes open with a 3-month interest penalty after 5 years  – you don’t have to do anything more.
  3. Provide quiet possession: you have the right to enjoy your property and to have “quiet possession” to the property free from interference from your lender, except if you are in default in which the Standard Charge Terms will govern the Lender’s rights to keep the property in good saleable condition, including making all reasonable and necessary repairs.

RPL represents buyers, sellers, and private lenders in the regards to all aspects of property ownership and mortgage lending. Contact me if you wish to discuss anything in this article or mortgages & lending in general.

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