Collateral vs Standard Mortgage Charge

When it comes to mortgages, there are two different types of charges: collateral and standard charge mortgages. It's important to understand the differences between the two charges and how they affect you and your mortgage.

Standard Charge Mortgage

A standard charge mortgage is the more traditional option. This type of mortgage/charge is registered only for the amount of your actual mortgage loan. For example, if you are getting a $500,000.00 mortgage, the charge will be registered for $500,000.00.

If you ever want to borrow more money in the future (like for renovations or debt consolidation), you’ll need to refinance your mortgage, which involves new legal fees and re-qualification.

Because it’s registered only for the amount borrowed, it’s typically easier to switch lenders at renewal time if you find a better rate or product elsewhere.

Best for: Borrowers who want flexibility to shop around easily at renewal, or who don’t expect to need extra funds later.

Collateral Charge Mortgage

A collateral charge mortgage is registered differently with the land title office. This charge is often registered for a higher amount than your actual mortgage, sometimes up to 125% of your home’s value.

Registering for a higher amount allows you to access additional funds in the future (for renovations, investments, etc.) without refinancing, as long as you qualify and you have enough equity in your property.

However, collateral charge mortgages are not easily transferable between lenders. To move your mortgage at renewal, you’ll likely need to discharge it and register a new one, which means you may incur legal fees.

Best for: Borrowers who may want to access home equity later or use products like Manulife One or TD’s collateral mortgage for flexible borrowing.

Bottom line: Both types of charges, standard and collateral, have advantages. It just depends on what's most important to you: freedom or borrowing flexibility.