Understanding your Mortgage Charge
All mortgage loans are secured by real property such as a house. Scotiabank will obtain mortgage security that will be registered in the appropriate land registry office. This is referred to as the registration of a “charge” and it gives Scotiabank the legal right to claim the registered property if the mortgage loan is in default under the terms of your mortgage loan.
Scotiabank offers two types of mortgage charges: Collateral or Conventional.
Collateral charges: security is provided in favour of The Bank of Nova Scotia (carrying on business as “Scotiabank”), registered in first position priority on the land and building. The specific details of the mortgage loan are not included in the charge that is registered on the title to your home. A separate credit agreement contains the specific terms of the mortgage loan. This collateral charge may secure other debt besides the mortgage loan.
Conventional charges: (in Quebec, an immovable hypothec): security is provided in favour of Scotia Mortgage Corporation (SMC), a wholly owned subsidiary of Scotiabank, registered in first position priority on the land and building. The specific details of the mortgage loan such as the amount, term and interest rate are included in the charge registered on title to your home. This conventional charge secures only the mortgage loan.
For more information, please visit the Canadian Banker's Association site.