Standard Charge Terms

“Make Sure You Clearly Understand Both Borrower And Lenders Responsibilities Before Signing A Mortgage Contract”

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When you accept a mortgage offering from a mortgage lender, you are also accepting the standard charge terms created by the lender and outlined in the mortgage contract.

The standard charge agree outlines the rights and responsibilities of the borrower during the time the mortgage is outstanding.

Failure to comply with all the listed requirements can put the mortgage into default, allowing the lender to exercise their rights which are also outlined in the document.

Once the mortgage contract is signed by the borrower, the borrower agrees to and promises to uphold each of obligations or covenants that are outlined in the mortgage contract.

Here are a list of the basic mortgage covenants that are likely to appear in the standard charge terms that a borrower will need to sign to receive mortgage funding.

  • Loan Repayment. The borrower agrees to repay the loan based on the repayment schedule that is outlined in the mortgage contract.
  • Property Insurance.  The borrower promises to keep adequate property insurance in place in order to protect the value of the real estate and concurrently protect the lender from any loss due to fire or other event that would damage the property and reduce its value.
  • Property Maintenance.  The borrower agrees to keep the property in a good state of repair and basically maintain it in a good saleable condition.
  • Waste Management.  The borrower agrees to not perform an actions or conduit that would result to waste being present on the property which could create damage to the property.
  • Property Taxes.  The borrower agrees to pay all property taxes in full and when do.   If the borrower fails to pay the property taxes, the lender can pay them for the borrower and then add them to the total balance owing.

Failure to comply with any and all of these covenants  will result in the lender considering the borrower to be in default at which time the lender can exercise its rights which have been agreed to by the borrower when the mortgage contract was signed.

The lender also has a number of covenants that they must agree to as well.

  • Certificate Of  Discharge.  Once the borrower or mortgagor has paid off the mortgage in full, the lender or mortgagee is required to provide the borrower with a certificate of discharge to officially communicate that the mortgage was paid in full.
  • Assignment Of Mortgage.  The borrower has the right to assign an outstanding mortgage to a new lender, provided the borrower or mortgagor is in good standing and that the borrower has the right to redeem the mortgage.
  • Provide Quiet Possession.  Other when in situations of default, the law provides the borrower with the right of quite possession which basically means the borrower can possess the property without any interference from the lender or mortgagee.


While the above borrower and lender covenants are going to be standard in just about any mortgage, the important thing to understand is your obligations as a borrower and the rights of the lender that you are agreeing to on signing.

You may not be able to alter any of these covenants or requirements, but you do need to understand them and comply with them in order to avoid the lender taking action against you in a situation of covenant default.

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About the Author Joe Walsh

I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel