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How is a Collateral Charge at Tangerine different from Conventional Charge?

Read about collateral charge mortgages.

When a house is mortgaged, it's used as security for a loan. This security is registered with a land registry office and is commonly known as a "charge". This charge gives the lender the legal right to claim the registered house if the loan is in default. There are two types of charges that can be registered by a lender; Conventional (or Standard) and Collateral. At Tangerine, our Mortgages are registered as a Collateral Charge.

How is a Collateral Charge at Tangerine different from Conventional Charge?

  • Registered for 100% of the property value
  • The specific details of the mortgage loan are not included in the charge that is registered on title against your house. A separate credit agreement contains the specific terms of the mortgage loan, such as the amount, interest rate and payments.
  • Creates room for future borrowing up to the charge amount without incurring legal costs*
  • Option to add a Home Equity Line Of Credit under current charge without incurring legal costs*
  • Transferring to another lender would involve refinancing through a lawyer with legal costs

  • Registered for the loan amount
  • The specific details of the mortgage loan such as the amount, interest rate and payments are included in the charge registered against your house.
  • Future borrowing would involve refinancing through a lawyer with legal costs
  • Adding a Home Equity Line Of Credit would involve refinancing through a lawyer with legal costs
  • Can be transferred to another lender without incurring legal costs if the other lender agrees

To learn more about mortgage security, visit the Canadian Bankers Association

 

*Subject to application approval under current Tangerine credit criteria.