Collateral Charge vs Standard Charge Mortgage in Ontario: What's the Difference?

When you take out a mortgage in Ontario, you probably focus on the interest rate and payment amount. Fewer borrowers think about how the mortgage is registered on title — yet this technical detail can significantly affect your options when you want to refinance, switch lenders, or access additional credit later. The two main registration types are the standard charge and the collateral charge, and understanding the difference can save you thousands in fees down the road.

What Is a Standard Charge Mortgage?

A standard charge mortgage registers on your property's title for the exact amount you borrow at the time of the loan. When you discharge the mortgage at renewal or payout, the charge comes off title.

Key features:

• The registered amount equals the loan amount
• Transferable to another lender at renewal without going through a full re-registration (a "straight switch")
• Switching lenders at renewal typically involves lower legal fees because the new lender can take an assignment of the existing charge
• Any refinancing — borrowing more money against the property — requires a new registration and involves legal fees

Standard charges are offered by most lenders, including many credit unions and some of the major banks.

What Is a Collateral Charge Mortgage?

A collateral charge mortgage registers on title for an amount greater than the amount you actually borrow — often 100–125% of your property's appraised value. The idea is that the registered amount acts as a ceiling: as long as your property value grows or you pay down the principal, you can borrow more against the same charge without re-registering (and without paying registration fees again).

Key features:

• Registered amount is typically higher than the mortgage balance
• Cannot be transferred (assigned) to another lender at renewal — you must discharge the old charge and register a new one
• Switching lenders at renewal involves full legal and registration fees, even if you are not borrowing additional money
• Often bundled with a line of credit (the "all-in-one" or HELOC-hybrid products)

Several major banks in Canada have moved a portion — or all — of their mortgage products to collateral charge registration. At the time of writing, verify with your specific lender what registration type they use, as this can change.

Why Does the Registration Type Matter?

At renewal: switching vs. staying

With a standard charge, you can shop around at renewal and switch to a new lender with minimal cost — the new lender simply takes an assignment of the existing charge. Legal costs are typically lower because there is no full discharge and re-registration.

With a collateral charge, switching lenders at renewal requires a full discharge of the existing charge and registration of a new one. You will pay:

• Discharge fee to the current lender (as of writing, verify the current amount — it varies by lender)
• Legal fees for the discharge and new registration
• Land transfer registration costs

These costs can erode or eliminate the savings from a better rate at the new lender. That is the trade-off: the collateral charge gives you flexibility to borrow more later without fees, but reduces your flexibility to leave without fees.

Refinancing: borrowing more money

Here the collateral charge can be an advantage. If you took out a collateral charge at 100% of your home's value and your home has appreciated, you may be able to access more equity by simply increasing your loan amount under the existing charge — no new registration, no registration fees. With a standard charge, you would need to re-register (at additional cost) to increase the amount above the original registered limit.

Second mortgages and other lenders

A collateral charge registered at 100% of value may show up on title as occupying the entire value of the property. A second lender — a private lender, HELOC provider, or unsecured lender — may see less room to lend against your equity. This can complicate accessing additional credit from other institutions.

How to Find Out Which Type You Have

The registration type is recorded in the documents from when you took out your mortgage. Look for:

• The mortgage commitment letter or mortgage instructions from your lender
• Your title insurance policy or real property report from closing
• Your lawyer's reporting letter from the original transaction

You can also have a title search run on your property — this will show the registered charge and its terms. A real estate lawyer can interpret what you find.

Can You Negotiate the Registration Type?

Sometimes. Not all lenders give you a choice, but it is always worth asking. If you prefer the flexibility to switch lenders at renewal, ask whether a standard charge is available. If the lender only offers collateral charges, factor the future switching costs into your decision.

Frequently asked questions