Canadian finance has a vocabulary problem. We translated 115 of the most confusing terms into plain English — with formulas, examples, and "do I actually need this" verdicts. Search below.
A 300-900 number that summarizes how risky lenders think you are.
READ →✦ InvestingA registered account where all growth is tax-free. Forever.
READ →◆ MortgagesThe total length of time to pay off a mortgage in full.
READ →● Personal LoansThe true yearly cost of a loan, including fees.
READ →▲ Business FinanceA federal tax credit for Canadian R&D spending. Up to 35% refundable.
READ →◆ MortgagesA qualification check that forces you to prove you can afford a higher rate.
READ →◆ MortgagesA revolving line of credit secured by your home equity.
READ →✦ InvestingA registered account combining the best of TFSA + RRSP for first-home buyers.
READ →Alberta's income support program for adults with severe disabilities.
The total length of time to pay off a mortgage in full.
The true yearly cost of a loan, including fees.
The mix of stocks, bonds, and cash in your portfolio.
Canada's equivalent of an SBA loan. Backed by the federal government.
The person who receives proceeds when an insurance policy pays out.
A single mortgage covering multiple properties.
A revolving credit limit for business operating expenses.
Non-refundable tax credit for those supporting a disabled dependent.
Tax-free monthly payment for families raising kids under 18.
Refundable tax credit topping up low-income workers' earnings.
Profit from selling an asset for more than you paid. Only 50% is taxed.
Tax on 50% of profits from selling investments (above $250K, 66.67%).
Federal protection of up to $100K per account category if a bank fails.
COVID-era $2,000/month benefit. Ended 2020. Replaced by EI + CRB.
Your everyday spending account. Used for bills and debit purchases.
Quarterly carbon-tax rebate for residents of carbon-priced provinces.
Mortgage insurance protecting lenders if you default. Required under 20% down.
Car insurance that pays for damage to your vehicle in a crash.
Interest on interest. The reason savings grow and debt spirals.
Car insurance that covers non-collision damage (theft, hail, vandalism).
A mortgage with at least 20% down payment. No CMHC insurance required.
Federal retirement pension based on lifetime contributions.
A loan you pay BEFORE receiving the money — pure credit-building.
A company that collects your credit history from lenders and sells it back to them.
The variety of credit types on your file (cards, loans, mortgage).
A service that alerts you to changes in your credit file.
The full file of your borrowing history — accounts, payments, inquiries.
A 300-900 number that summarizes how risky lenders think you are.
The percentage of your credit limit you're currently using.
Combining multiple debts into a single loan with lower rate.
The amount you pay out of pocket before insurance kicks in.
Automatic electronic payment into your bank account.
Income replacement if illness or injury prevents you from working.
Federal non-refundable tax credit for those with severe disability.
A platform where you buy/sell stocks and ETFs yourself.
A cash payment from a company to its shareholders.
Investing the same amount on a fixed schedule, regardless of price.
Federal benefits for unemployment, illness, parental leave, and more.
15 weeks at 55% of insurable earnings for birth mothers.
Up to 40-69 weeks of leave for new parents. Standard or Extended.
Federal benefit paying 55% of insurable earnings during illness.
One of two Canadian credit bureaus. Used by 70% of mortgage lenders.
A loan or lease secured by the equipment you're buying.
An Exchange-Traded Fund. Buy a basket of stocks in one ticker.
The annual fee a fund charges. Eats into returns directly.
A registered account combining the best of TFSA + RRSP for first-home buyers.
The most common credit scoring model. Range 300-900.
Federal program letting first-time buyers save $40K tax-free for a home.
A mortgage where the interest rate is locked for the term.
An agreement to exchange currencies at a fixed rate on a future date.
The hidden markup a provider adds to the mid-market rate.
A Guaranteed Investment Certificate. Lock in a fixed rate for a term.
A monthly top-up for low-income seniors on top of OAS.
Total sales before any deductions.
Federal sales tax. Different provinces add their own (PST or harmonized HST).
Quarterly tax-free payment to low- and middle-income individuals.
A formal credit check that lowers your score 5-10 points.
A revolving line of credit secured by your home equity.
A mortgage with less than 20% down. Requires CMHC insurance.
A savings account paying significantly above prime savings rates.
An international bank account number format used in Europe and the Middle East.
A loan repaid in fixed monthly payments over a set term.
What you pay (monthly, annually) for insurance coverage.
Sending money instantly between Canadian bank accounts via email or SMS.
Selling unpaid invoices for immediate cash at a discount.
The rate on your NEXT dollar of income. Not your average rate.
The Canadian term for total annual fund fees.
Cash today in exchange for a slice of tomorrow's sales.
The "real" exchange rate — the midpoint between bid and ask in the interbank market.
Insurance lenders require when you put less than 20% down.
Replacing your current mortgage with a new one — often to borrow more.
Negotiating a new term when your mortgage ends.
A qualification check that forces you to prove you can afford a higher rate.
A professionally-managed pool of investor money. Sold by banks.
A federal pension paid to Canadians 65+, funded by general tax revenue.
Ontario provincial income support for adults with disabilities.
Combined Ontario tax credits paid monthly to low/middle-income residents.
A short-term line of credit attached to your chequing account.
A short-term, very high-cost loan repaid on your next payday.
The biggest factor in your credit score — did you pay on time?
A fee for paying off your mortgage early or breaking your term.
The benchmark rate banks charge their best customers. Anchors variable loans.
A registered savings plan for people with disabilities. Up to $90K grants.
A registered account for kids' education. Government matches 20%.
A loan against home equity for seniors (55+). No monthly payments.
An automated investment service that builds and rebalances an ETF portfolio.
Pre-tax retirement savings. Withdraw later at (hopefully) lower tax bracket.
Subtracting RRSP contributions from taxable income — generates a refund.
An account designed for saving, paying interest on balance.
A second loan secured by your home, behind your primary mortgage.
A credit card backed by a refundable deposit.
A loan backed by collateral the lender can seize on default.
Interest calculated only on the original principal.
A credit check that does NOT affect your score.
The current exchange rate for immediate delivery (typically 2 business days).
A federal tax credit for Canadian R&D spending. Up to 35% refundable.
The international banking messaging network used for cross-border wires.
Your employer's yearly statement of wages and deductions.
A slip reporting investment income — interest, dividends, royalties.
A direct reduction of tax owed. Better than a deduction at low income.
A reduction of taxable income. Worth more at higher marginal rates.
Life insurance for a set term (10/20/30 years). Cheapest option.
A lump-sum business loan repaid over a fixed term.
A registered account where all growth is tax-free. Forever.
The other Canadian credit bureau. Used by 60% of credit-card issuers.
Permanent insurance that builds cash value. 5-10× more expensive than term.
Sending large amounts internationally via bank-to-bank network.
Tax deducted at source before money reaches you.
The cash a business has to fund day-to-day operations.