Definition
A collateral mortgage charge is a mortgage deed type registered at the Land Registry for an amount that may exceed the initial loan — sometimes 100% to 125% of property value. The advantage: allowing future advances (loan extension, HELOC addition, home-secured car loan) without going back to the notary or registering a new deed.
Major drawback: reduced portability. On transfer to a new lender, the new lender must redo the deed from scratch (discharge of old collateral mortgage + new registration), generating additional legal fees (often CA$500-1,000). Several A lenders, including TD and Scotiabank, use collateral mortgage by default; others like RBC offer the choice.
Watch for in your commitment letter: the mention "collateral mortgage" or "hypothèque collatérale". Ask your notary or broker about consequences on future portability and compute the 10-year total cost before signing.