Hey guys,

The financial world is full of so many words and terms that it could almost be its own language. Thankfully, your friends here at Morgix are going to be creating a glossary or index of terms related to personal finances and mortgages in general.

Our hope is that by educating you about some of the financial worlds lingo, we can make it easier for you to choose not just the right company (which we hope is Morgix!) but also the right financial product to take care of the issue at hand.


Professionals that are responsible for performing accounting functions that include audits or a financial statement analysis. Accountants typically find employment with accounting firms or in a company’s internal finance or accounting department.

Adjustable-Rate Interest Rate

Adjustable-rate is a type of interest that applies to certain financial loans like some mortgages and vehicle loans: the interest rate increase or decrease from time to time based on various factors such as the Bank of Canada’s prime rate, or other lender factors.


Accounting technique with the purpose of periodically lowering the book value of a loan or an intangible financial instrument over a set amount of time.

What amortization means for your mortgage is that you are planning out the future of the mortgage to judge how many years it will take to pay it down. Right now, the standard ‘amortization’ period is 25 years.

Annual interest rate

The interest rate that applies to the debt over the course of a year. It’s also known as the annual percentage rate. You’ll often see ‘APR’ in marketing materials for vehicles or other big purchases that typically require a loan. A 10% annual percentage rate simply means that you will be charged 10% of the principal each year, as the cost of borrowing. Yet another great reason to pay down that debt!


Broker refers to a person or firm that manages all transactions between a buyer and a seller. They also typically receive a commission upon completion of a deal.

Cash Flow

Cash flow for your personal finances is what you have for ‘useable funds’ and is generally measured each month.


This is how much you owe to someone else. Usually the bank, a retailer, a credit card company, or another type of lender. In most cases people generally have debt for their vehicle, their home, and other retail credit types of purchases (such as using a credit card for your Amazon purchases).

Down Payment

When you get a new loan or mortgage, you usually have the option to put down a ‘down payment’, which is an initial payment to bring down the initial amount (principal) of the loan. Some loan’s interest rates can be affected based on the amount of down payment.

For example, with mortgages, if you are able to put a 20% down payment, you will almost certainly receive more favourable terms on your mortgage.

Exchange-traded fund (or ETF)

A bundle of securities that are tradable on the exchange similar to a stock… In other words, an ETF is a simpler method of buying a variety of stocks that typically come in ‘baskets’ arranged by industry or risk… Think low risk stocks ETFs, or banking stock ETFs, for example.

Guarantor (AKA Co-Signer)

Financial term for an individual or organization that agrees to pay if a borrower fails to pay on their loan obligation. For example, if you are ready to get your first mortgage or vehicle loan, but have no prior credit, you may be required to ask your parents to act as a guarantor or cosigner to add a safety layer to the loan to make sure the lender is comfortable.


A mortgage is the big loan you take out to purchase a home. There are a lot of terms related to mortgages, but the term ‘mortgage’ itself is just the special name for a ‘home loan’.

Debt Consolidation

Debt consolidation is a wonderful financial tool that can allow you to combine multiple ‘debts’ under one new loan…

Think of it as a way to squeeze your big jars of debt with high interest into one smaller jar that often has a lower interest rate. In other words, debt consolidation is a way to lessen the load, but you’re still paying down the same amount of debt.


HELOC is short for ‘Home Equity Line of Credit‘, which is a way to borrow money from the ‘equity’ you own in your home. In other words, if you have $50,000 of equity, you could borrow a portion of this amount. Generally people use HELOCs for home improvements or emergency expenses.


The amount due to creditors for previous transactions. For a homeowner, this would be the amount you owe on your various loans: Total of remaining mortgage, vehicle loan, and credit cards.

Overdraft Protection

Overdraft extends credit from financial institutions when an individual’s account hits zero. You may have seen this before where your checking account goes below zero (hopefully not too often!). The allowance to enter the negative, without causing an ‘insufficient funds’ error is your overdraft protection.


Principal is the ‘starting amount’ of a loan or mortgage. Since paying down a loan or mortgage involves an interest portion as well as the ‘starting amount’, it is good to keep an eye on the remaining principal.

Return on investment (RoI)

Measures the efficiency of an investment and allows potential investors to compare investments. This is the way you judge if an investment is good or bad… You want to see a positive RoI!!!


Representation of the shareholders’ stake in an organization, or at least that’s how you’d hear about equity in terms of the stock market.

In terms of real estate equity, we’re talking about the amount of the property that you ‘own’ or have ‘paid down’.