There are two ways a mortgage lender registers a loan when your home is used as the security: as either a “mortgage charge” or as a “collateral charge” – these two charges are incredibly different.
Mortgage charges may at any time be transferred to another lender at a minimal cost of as low as $30. This is perfect. It leaves the consumer with the power to choose and gives them the ability to move their mortgage to another lender (and save money) with ease. Of course, banks don’t like this.
Collateral charges, on the other hand, are registered under the Personal Property Security Act (PPSA) and can only be registered or discharged— they CAN’T be transferred. Therefore, if you have a collateral mortgage charge, and frankly you wouldn’t even know if you did because the banks don’t willingly tell you, then you’ll be required to re-register a new mortgage with a lawyer at a cost in excess of $1,000.
For more info, check out the video CBC Marketplace created about collateral mortgage charges.
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