Housing Glossary
Plain-English definitions of every real estate term you will encounter when buying, selling, or investing in the GTA. No jargon, no fluff — just the clarity you need to make confident decisions.
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165 terms found
Affordability Index
A measure of how affordable housing is for a typical household in a given market.
Agreement of Purchase and Sale (APS)
The legally binding contract between a buyer and seller that outlines all the terms of a real estate transaction.
Appreciation
The increase in a property's market value over time.
Asbestos
A hazardous mineral fibre once widely used for its fire resistance and insulation properties, found in insulation, ceiling tiles, floor tiles, siding, and pipe wrapping of homes built before 1990.
Assumable Mortgage
A mortgage that allows a new buyer to take over the seller's existing loan, inheriting the current interest rate, remaining balance, and terms.
Average Sale Price
The total dollar value of all homes sold divided by the number of sales in a given period.
Balanced Market
A market condition where supply and demand are roughly equal, giving neither buyers nor sellers a distinct advantage.
Benchmark Price
A standardized price metric calculated using the MLS Home Price Index (HPI) that represents the price of a 'typical' home in a given area.
Blended Rate Mortgage
A refinancing option where your lender combines your existing mortgage rate with the current market rate to create a new blended rate, rather than breaking your mortgage and paying a penalty.
Bridge Financing
A short-term loan that bridges the gap when you buy a new home before selling your current one and the closing dates don't align.
Building Envelope
The physical barrier between the interior conditioned space of a building and the exterior environment, consisting of the roof, exterior walls, windows, doors, and foundation.
Bully Offer (Pre-emptive Offer)
An offer submitted before the seller's scheduled offer review date, designed to pressure the seller into accepting early and bypassing the competition.
Buyer Representation Agreement (BRA)
A contract between a buyer and their real estate agent that formalizes the working relationship.
Buyer's Market
A market condition where there are more homes for sale than there are buyers, giving purchasers the advantage.
Cap Rate
The capitalization rate is the ratio of a property's Net Operating Income (NOI) to its purchase price or current market value, expressed as a percentage.
Capital Gains Tax
Tax on the profit from selling a property that is not your principal residence.
Carrying Costs
The ongoing monthly and annual expenses of owning a property beyond the mortgage payment.
Cash Flow
The net amount of money moving in and out of a rental property each month after all expenses are paid.
Cash-on-Cash Return
Annual pre-tax cash flow divided by total cash invested, showing the return on your actual out-of-pocket investment.
Chattels vs Fixtures
Fixtures are items permanently attached to the property (light fixtures, built-in shelves, furnaces) that are included in the sale by default.
Closed Mortgage
A mortgage with restrictions on how much extra you can pay toward the principal during the term.
Closing Date
The date on which the ownership of the property officially transfers from the seller to the buyer.
Coming Soon Listing
A property that is marketed to potential buyers before it is officially listed on MLS.
Common Elements
The parts of a condominium property that are shared by all owners and maintained by the condo corporation.
Common Property
The shared areas and facilities owned collectively by all unit owners in a condominium corporation, maintained and managed through condo fees.
Comparables (Comps)
Recently sold properties with similar characteristics -- size, style, age, condition, and location -- used to estimate a property's current market value.
Comparative Market Analysis (CMA)
A report prepared by a real estate agent that evaluates recently sold comparable properties (comps) in your area to estimate your home's market value.
Conditional Offer
An offer to purchase that includes one or more conditions that must be fulfilled before the deal becomes firm.
Condo Apartment
A unit within a multi-story residential building that is individually owned and part of a condominium corporation.
Condo Board
A group of volunteer unit owners elected by the condo corporation's members to manage the building's affairs.
Condo Declaration
The foundational legal document that creates the condominium corporation and defines each unit's boundaries, common elements, and the percentage of common expenses each owner is responsible for.
Condo Financial Statement
The annual audited financial report that details the condominium corporation's income, expenses, reserve fund balance, and overall financial health.
Condo Insurance
An insurance policy purchased by a unit owner to cover personal contents, improvements and betterments made to the unit, personal liability, and any deductible the condo corporation's master policy might pass on to individual owners.
Condo Renovation Rules
The restrictions and approval processes that govern alterations to individual units and common elements within a condominium corporation.
Condo Townhouse
A townhouse that is part of a condominium corporation.
Contingency Plan
A backup strategy prepared in advance in case your property doesn't sell within the expected timeframe or at the desired price.
Counteroffer
A response to an offer that changes one or more terms of the original proposal.
Debt Servicing
The total annual cost of mortgage payments -- both principal and interest -- on an investment property.
Deposit
A sum of money the buyer puts forward when making an offer, held in trust by the listing brokerage as a sign of good faith.
Detached Home
A standalone residential property that doesn't share any walls with neighbouring buildings.
Disclosure Statement
A document completed by the seller that reveals known issues with the property, such as past flooding, structural repairs, insurance claims, or the presence of substances like vermiculite insulation or underground oil tanks.
Down Payment
The portion of the home's purchase price you pay upfront, with the remainder covered by your mortgage.
Due Diligence Period
The time a buyer has to thoroughly investigate all aspects of a property before becoming fully committed to the purchase.
Easement
A legal right that allows someone other than the property owner to use a portion of the property for a specific purpose.
Electrical Panel
The main distribution point for a home's electrical system, where electricity from the utility enters the home and is divided into individual circuits.
Encroachment
When a structure, fence, landscaping, or other improvement extends beyond a property's legal boundaries onto neighbouring land or public property.
Equity
The difference between your property's current market value and the amount you owe on your mortgage.
Escalation Clause
A clause in an offer that automatically increases the buyer's purchase price by a set amount above any competing offer, up to a specified maximum.
Eviction
The legal process of removing a tenant from a rental property in Ontario.
Exclusive Use Area
A portion of the common elements that is restricted for the exclusive use of a specific unit owner.
FINTRAC
The Financial Transactions and Reports Analysis Centre of Canada -- the federal agency responsible for detecting and preventing money laundering and terrorist financing.
Firm Offer
An offer with no conditions attached, meaning the buyer is committing to the purchase without any escape clauses.
Fixed Rate Mortgage
A mortgage where the interest rate is locked in for the entire term (typically 1 to 5 years in Canada).
Flood Insurance
Additional coverage for water damage from overland flooding -- rivers overflowing, heavy rainfall overwhelming drainage, or spring snowmelt -- that is typically not included in standard home insurance policies.
Foundation Crack
A crack in the concrete foundation walls or floor of a building.
Freehold
A form of property ownership where you own both the building and the land it sits on, outright and indefinitely.
Gross Debt Service Ratio (GDS)
The percentage of your gross household income required to cover housing costs, including mortgage payments (principal and interest), property taxes, heating costs, and 50% of condo fees if applicable.
Gross Rent Multiplier (GRM)
A quick valuation metric calculated by dividing the property's purchase price by its gross annual rental income.
HELOC (Home Equity Line of Credit)
A revolving credit facility secured against the equity in your home, allowing you to borrow, repay, and borrow again up to a set limit.
Home Inspection
A thorough, visual examination of a property's physical condition, conducted by a licensed home inspector.
Home Insurance
Comprehensive coverage protecting your home's structure, personal belongings, and liability in case of damage, theft, or injury on your property.
Home Warranty
A service contract that covers the cost of repairing or replacing major home systems and appliances (like the furnace, water heater, or electrical system) for a set period after purchase.
Homebuyer's Plan (HBP)
A federal program that allows first-time homebuyers to withdraw up to $60,000 from their RRSPs (Registered Retirement Savings Plans) to put toward a down payment on a home, tax-free.
House Hacking
A strategy where the homeowner lives in one part of a property and rents out the rest to offset mortgage and housing costs.
Housing Starts
The number of new residential construction projects that have begun in a given period, tracked by CMHC (Canada Mortgage and Housing Corporation).
HST on New Homes
The 13% Harmonized Sales Tax applied to newly constructed homes, substantially renovated homes, and converted properties in Ontario.
HVAC System
The Heating, Ventilation, and Air Conditioning system that controls a home's temperature and air quality.
Inspection Period
The timeframe specified in a conditional offer during which the buyer must complete a home inspection and decide whether to proceed with the purchase.
Insured Mortgage
A mortgage that requires default insurance because the down payment is less than 20% of the purchase price.
Internal Rate of Return (IRR)
The annualized percentage return on a real estate investment, accounting for all cash flows over the holding period.
Irrevocable Period
The window of time during which an offer cannot be withdrawn by the party who submitted it.
Kitec Plumbing
A plumbing system using brass fittings and orange (hot) and blue (cold) flexible plastic piping, installed in Canadian homes and condos from 1995 to 2007.
Knob and Tube Wiring
An outdated electrical system common in homes built before 1950, using ceramic knobs and tubes to run individual wires through wall cavities and floor joists.
Land Transfer Tax
A tax paid by the buyer when a property changes hands in Ontario.
Landlord's Consent
The property owner's required approval before a tenant can sublet their unit or assign their lease to another person.
Last Month's Rent (Ontario)
The only legal deposit a landlord can collect from a tenant in Ontario, held as prepayment for the final month of the tenancy.
Lease Renewal
The process of extending a tenancy beyond its original term.
Leasehold
A form of property ownership where you own the building or unit but not the land beneath it.
Lender's Title Insurance
A one-time insurance policy that protects the mortgage lender against financial loss caused by defects in the property's title, such as fraud, forgery, encroachment issues, or errors in public records.
Lien
A legal claim registered against a property's title for unpaid debts.
Listing Agreement
A contract between a property owner and a real estate brokerage that authorizes the brokerage to market and sell the property.
Listing Expiration
The date specified in your listing agreement when the contract between you and your brokerage ends.
Locker Unit
A storage space in a condominium building that, like parking, may be owned as a separate unit or designated as an exclusive-use common element.
Long-Term Rental
A residential tenancy of one year or more, governed by the Residential Tenancies Act in Ontario.
Maintenance Fees
Monthly fees paid by condo owners to the condo corporation to cover the costs of operating and maintaining common elements.
Material Latent Defect
A hidden defect in a property that is not discoverable through a reasonable inspection and that would affect a buyer's decision to purchase or the price they'd pay.
Median Price
The middle price point when all home sales in a given period are arranged from lowest to highest.
Months of Inventory (MOI)
A calculation that shows how long it would take to sell all currently listed homes at the current pace of sales, assuming no new listings enter the market.
Mortgage
A loan secured against a property that allows you to buy a home without paying the full purchase price upfront.
Mortgage Amortization
The total length of time it takes to pay off your mortgage in full if you make every scheduled payment.
Mortgage Broker
A licensed professional who acts as an intermediary between borrowers and multiple mortgage lenders.
Mortgage Default
The failure to meet the terms of your mortgage agreement, most commonly by missing required payments.
Mortgage Default Insurance (CMHC Insurance)
Insurance required by Canadian law when a buyer makes a down payment of less than 20% of the purchase price.
Mortgage Discharge
The legal process of removing the mortgage charge from your property's title after the loan is fully repaid.
Mortgage Penalty
A fee charged by your lender if you break your mortgage before the term ends.
Mortgage Pre-Approval
A process where a lender reviews your financial situation -- income, debts, credit score, down payment -- and provides a written commitment for a specific mortgage amount at a guaranteed rate (usually held for 90 to 120 days).
Mortgage Qualification
The process lenders use to determine how much you can borrow based on your income, existing debts, credit score, down payment, and the property itself.
Mortgage Renewal
The process of renegotiating your mortgage terms when your current term expires.
Mortgage Stress Test
A federal requirement that all mortgage applicants must qualify at a rate higher than their actual contract rate.
Mould
A type of fungus that grows in damp, humid conditions and can be found on walls, ceilings, in basements, around windows, and inside HVAC systems.
Moving Costs
The total expenses associated with physically relocating from one home to another, including professional movers or truck rental, packing supplies, insurance, temporary storage, utility setup fees, mail forwarding, and cleaning costs for both properties.
Multiple Listing Service (MLS)
A cooperative database system used by real estate brokerages to share property listings with each other.
Multiple Offers
A situation where two or more buyers submit offers on the same property at the same time.
N-Series Notices
The standardized legal notice forms (numbered N1 through N13) used by Ontario landlords for rent increases, lease terminations, and other tenancy changes as prescribed by the Residential Tenancies Act.
Negative Cash Flow
When monthly expenses -- including mortgage payments, property taxes, insurance, condo fees, and maintenance -- exceed the rental income a property generates.
Net Operating Income (NOI)
The total income generated by a rental property minus all operating expenses, before mortgage payments and income taxes.
Non-Resident Speculation Tax (NRST)
Ontario's 25% tax on residential property purchases by foreign nationals, foreign corporations, and taxable trustees.
Parking Unit
A designated parking space in a condominium building that may be owned as a separate unit (with its own title) or assigned as an exclusive-use common element.
Plan of Subdivision
A legal document registered on title that shows how a larger parcel of land has been divided into individual lots, blocks, streets, and public lands for development.
Plumbing System
The network of pipes, fixtures, and fittings that deliver water to a home and remove wastewater.
Poly B Plumbing
Polybutylene piping used extensively in Canadian homes from the 1970s to the early 1990s as a cheaper alternative to copper.
Portable Mortgage
A mortgage feature that allows you to transfer your existing mortgage -- including the current rate, terms, and remaining balance -- from one property to another when you move.
Positive Cash Flow
When monthly rental income exceeds all property expenses -- mortgage payments, property taxes, insurance, maintenance, condo fees, and vacancy allowance -- generating profit each month.
Power of Attorney
A legal document that authorizes another person (the attorney) to act on your behalf in specified matters, including real estate transactions.
Price per Square Foot
Property value divided by total livable area, used to compare values across different sized properties.
Principal Residence Exemption (PRE)
A CRA tax exemption that eliminates capital gains tax on the profit from selling your primary home.
Property Management
The professional handling of a rental property's day-to-day operations, including tenant screening, rent collection, maintenance coordination, and lease administration.
Property Standards By-law
Municipal regulations that set minimum standards for the maintenance, safety, and occupancy of buildings and properties.
Property Tax
An annual municipal tax based on the assessed value of your property, funding local services like roads, schools, transit, police, fire, and waste collection.
Property Tax Assessment
The process by which the Municipal Property Assessment Corporation (MPAC) determines the assessed value of your property for the purpose of calculating property taxes.
R-Value
A measure of a material's resistance to heat flow, used to rate the thermal performance of insulation, windows, and other building components.
Radon
A naturally occurring, odourless, colourless radioactive gas that seeps into homes through cracks in the foundation, gaps around pipes, and other openings.
Real Estate Investment Trust (REIT)
A publicly traded company that owns, operates, or finances income-producing real estate and distributes most of its taxable income to shareholders as dividends.
Real Estate Portfolio
A collection of investment properties owned by an individual or entity, managed as a unified investment strategy.
RECO (Real Estate Council of Ontario)
The regulatory body that governs real estate professionals in Ontario.
Rent Control
Ontario's regulation that limits annual rent increases for most residential tenancies to the provincial guideline amount, which is set each year based on the Consumer Price Index.
Rental Yield
The annual rental income generated by a property expressed as a percentage of its purchase price or current market value.
Reserve Fund
A savings account maintained by the condo corporation to pay for major repairs and replacements of common elements -- things like the roof, elevators, parking garage, and windows.
Reserve Fund Study
A comprehensive engineering report, required every three years in Ontario, that assesses the condition of a condo building's major components and estimates future repair and replacement costs.
Residential Tenancies Act (RTA)
Ontario's primary legislation governing the relationship between residential landlords and tenants.
Right of First Refusal
A provision in some condominium declarations that gives the condo corporation the legal right to match an outside buyer's offer and purchase the unit themselves before the sale to the outside buyer can be completed.
Roof Lifespan
The expected functional life of a roofing system, which varies by material.
Sales-to-New-Listings Ratio (SNLR)
The percentage of new listings that sold in a given period, calculated by dividing the number of sales by the number of new listings.
Second Mortgage
An additional mortgage taken out on a property that already has an existing first mortgage.
Security Deposit
In Ontario, the rules around security deposits are strict and often misunderstood.
Seller's Market
A market condition where buyer demand exceeds the supply of available homes, giving sellers the upper hand.
Semi-Detached Home
A residential property that shares one wall with an adjoining home, with each side having its own separate entrance, lot, and ownership.
Severance
The legal process of dividing a single property into two or more separate parcels, each with its own legal title.
Short-Term Rental (STR)
Temporary accommodation typically rented for fewer than 28 consecutive days, commonly listed on platforms like Airbnb and VRBO.
Special Assessment
A one-time fee charged to condo owners when the reserve fund doesn't have enough money to cover a major repair or unexpected expense.
Statement of Adjustments
A detailed financial document prepared by the buyer's and seller's lawyers that itemizes all costs, credits, and adjustments between the parties at closing.
Status Certificate
A legal document that provides a snapshot of a condo corporation's financial and legal health.
Structural Issue
Any problem affecting the load-bearing components of a building -- the foundation, beams, columns, load-bearing walls, and floor joists that keep the structure standing.
Subject Property
The specific property being appraised, evaluated, or purchased in a real estate transaction.
Survey
A professional measurement and mapping of a property's boundaries, structures, easements, and encroachments, prepared by a licensed Ontario Land Surveyor.
Tarion Warranty
Ontario's new home warranty program, administered by Tarion Warranty Corporation.
Tenant Default
A failure by a tenant to meet their obligations under the lease or the Residential Tenancies Act.
Title Insurance
A one-time insurance policy purchased at closing that protects the buyer (and their lender) against title defects, liens, encroachments, fraud, and other ownership issues that may be discovered after the purchase.
Title Insurance
A one-time insurance policy that protects property owners and lenders against financial loss from defects in a property's title, including fraud, forgery, liens, encroachments, and zoning violations that existed before the policy was issued.
Title Insurance (Buyer's)
A one-time insurance policy purchased at closing that protects the buyer against unknown title defects, liens, encroachments, fraud, and survey issues that existed before you took ownership.
Title Search
A legal investigation conducted by your real estate lawyer to verify that the seller has clear ownership of the property and the right to sell it.
Total Debt Service Ratio (TDS)
The percentage of your gross household income required to cover all debt obligations, including housing costs (mortgage, taxes, heating, half of condo fees) plus car loans, student loans, credit card payments, and any other recurring debt.
Townhouse
A multi-level residential property that shares one or both side walls with adjacent units.
TRESA (Trust in Real Estate Services Act)
Ontario's updated legislation governing real estate transactions, which replaced REBBA (Real Estate and Business Brokers Act) in 2023.
TRREB (Toronto Regional Real Estate Board)
The professional organization that governs the MLS system across the Greater Toronto Area, serving over 70,000 real estate professionals.
Underused Housing Tax (UHT)
A federal 1% annual tax on the value of vacant or underused residential property in Canada, primarily targeting foreign owners but also requiring certain Canadian owners to file a return.
Unit Entitlement
The ownership percentage assigned to each unit in a condominium corporation, as set out in the declaration.
Vacancy Rate
The percentage of rental units in a given area that are unoccupied at a point in time.
Value-Add Property
A property that can be improved through renovations, better management, or repositioning to increase its value and income potential.
Variable Rate Mortgage
A mortgage where the interest rate fluctuates with the lender's prime rate, which tracks the Bank of Canada's overnight policy rate.
Vermiculite Insulation
A lightweight, pebble-like mineral insulation commonly poured into attic spaces and wall cavities of homes built from the 1920s through the 1990s.