When you get a mortgage in Canada, your lender registers it on the title of your home. This registration is called a mortgage charge, and it comes in one of two forms: standard or collateral.
Most people focus on interest rates and terms—but the type of charge affects how easily you can switch lenders or access equity in the future.
Standard Charge Mortgage
A standard charge registers your mortgage for the exact amount you borrow.
Advantages:
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Easier to switch lenders at renewal—usually no legal fees if you’re not changing the loan amount.
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More transparent—you know exactly what’s registered on title and how it affects future flexibility.
Drawbacks:
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If you want to borrow more later (for renovations, investments, or debt consolidation), you’ll likely need to refinance and pay legal fees.
Best suited for: Borrowers who want flexibility to move lenders at renewal and aren’t planning to access additional equity in the short term.
Collateral Charge Mortgage
A collateral charge registers a higher amount than you’re borrowing—often up to 100 percent (or more) of your home’s value. This opens the door to features like a line of credit or the ability to borrow more later without refinancing.
Advantages:
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Easier to access additional funds in the future without having to refinance.
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Often includes flexible features like a readvanceable mortgage or home equity line of credit (HELOC).
Drawbacks:
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Historically, these mortgages were more expensive to move at renewal due to legal costs. However, more lenders now offer collateral switch programs to help reduce or eliminate these fees.
Best suited for: Borrowers who want access to future equity and are comfortable staying with the same lender, or who are open to working with lenders that offer collateral switch options.
Which One Is Right for You?
Here’s how I typically guide clients:
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If your goal is flexibility to shop around at renewal, a standard charge tends to offer the cleanest path forward.
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If you’re likely to access equity in the future, a collateral charge may be more strategic—especially if your lender offers flexible borrowing features.
Many clients assume they can easily switch lenders down the road—but that depends on how your mortgage was originally registered. Understanding the difference upfront helps avoid surprise costs or restrictions later on.
Final Thought
Your mortgage is more than just a rate—it's a tool that should align with both your short-term needs and long-term goals. Choosing the right charge type can make a big difference when it comes time to renew, refinance, or borrow again.
If you’d like help reviewing your mortgage setup—or deciding which option is right for you—let’s connect. I’d be happy to walk you through it.