Principal & interest
Principal is the outstanding borrowed amount. Interest is the cost charged for borrowing it. A regular mortgage payment usually includes both.
Term & amortization
The term is the period covered by the current mortgage contract. Amortization is the estimated total repayment period. They are not the same.
Equity & loan-to-value
Equity is the property value less debt secured against it. Loan-to-value compares the mortgage amount with the property value used by the lender.
Open & closed
Open mortgages generally allow repayment without a prepayment penalty. Closed mortgages limit repayment flexibility during the term, subject to their privileges.
Approval & closing
Approval may have conditions still to satisfy. Closing is when the transaction is completed and funds are advanced.
General information only. Product availability, eligibility and conditions vary by lender and application.