Common Terms Every Homebuyer Should Know

The home-buying process comes with its own language, and it can feel overwhelming at first. This glossary was created to give buyers a clear, easy-to-reference guide of commonly used terms. Whether you’re navigating financing, reviewing agreements, or selecting finishes, these definitions are here to help you feel informed at every step so you can move forward feeling confident in your decisions.

Financing & Mortgage

Approval
A lender’s confirmation of how much you may be able to borrow, based on your financial information. Pre-approval helps set a realistic budget before shopping for a home.

Mortgage
A loan used to purchase a home, repaid over a defined period through regular payments that include principal and interest. 

Down Payment
The upfront amount you pay toward the purchase price of a home. It is typically a percentage of the total price and can vary depending on the home price and purchase type.

Deposit Structure
The schedule outlining when and how deposits are paid, often in multiple installments for pre-construction homes.

Interest Rate
The percentage charged by a lender for borrowing money. This rate impacts your monthly mortgage payment and total cost over time.

Fixed vs. Variable Rate
A fixed rate stays the same for the term of your mortgage, while a variable rate can change based on market conditions.

Amortization Period
The total length of time it will take to fully pay off your mortgage, often ranging from 25 to 30 years.

Buying & Legal Process

Offer
A legally binding document outlining terms under which a buyer agrees to purchase from the seller. 

Conditional Offer
An offer that depends on specific conditions being met, such as financing approval or legal review.

Firm Offer
An offer with no remaining conditions. Once accepted, it is legally binding.

Deposit
An initial payment made with an offer, showing commitment to the purchase and is applied toward the final price.

APS (Agreement of Purchase and Sale)
The legal contract outlining the terms, conditions, and details of the home purchase between buyer and seller.

Statement of Adjustments
A document provided before closing that details final costs, credits, and adjustments between the buyer and seller.

Closing Costs
Additional expenses due at closing, such as legal fees, land transfer tax, and adjustments, separate from the purchase price.

Closing Date
The date when ownership officially transfers to the buyer and final payments are completed.

Occupancy Date
The date when a buyer is permitted to move into the home, which may be before final closing for condos.

Assignment Sale
When a buyer sells their rights under the purchase agreement to another buyer before taking final ownership of the home.

Interim Occupancy
A period common in new construction, where buyers can live in the home before final ownership is registered.

Occupancy Fee
A monthly fee paid during interim occupancy that covers estimated interest, taxes, and maintenance fees.

Title
Legal ownership of a property, officially transferred to the buyer on closing.

Land Transfer Tax
A government tax paid when property ownership changes hands, typically due on closing.

Tarion Warranty
A consumer protection program in Ontario that provides warranty for new homes, including deposit protection and construction defects.

Property & Ownership

Freehold
A type of ownership where you own both the home and the land it sits on. 

Maintenance Fees
Monthly fees that cover shared services such as landscaping, snow removal, or private road maintenance, depending on the community.

Condo Fees
Monthly fees paid by condominium owners to maintain common areas, amenities, and shared community services.

Amenities
Shared features within a community or building, such as gyms, parks, lounges, or playgrounds.

Appraisal
A professional assessment of a property’s value, typically required by lenders before final mortgage approval.

POTL (Parcel of Tied Land)
A form of ownership where a home is freehold but includes shared amenities, with maintenance fees collected for their upkeep.

Walk-Out Basement
A basement level that opens directly to the outdoors, usually due to a sloped lot.

Design & Planning

Décor Centre/Experience Centre
The location or process where buyers select interior finishes, upgrades, and design options for their home from the builder.

Model Elevation
The exterior appearance of a home, including the style, materials, roofline, and architectural details.

Floor Plan
A scaled drawing that shows the layout of a home, including room sizes and placement.

Site Plan
A map illustrating how homes, roads, lots, and amenities are arranged within a community.

Master-Planned Community
A thoughtfully designed neighbourhood with coordinated homes, amenities, and infrastructure planned as a whole.

Standard vs. Upgrade
Standard features are included in the base price, while upgrades are optional enhancements available at an additional cost.

Design Package
A curated bundle of interior finishes and/or upgrades offered together to simplify design selections and ensure cohesive design throughout the home.

Feature Sheet
A summary document outlining the specific materials, colours, finishes, key features and specifications selected for the home.

Community & Development

Phase Release
The staged release of homes within a development, often aligned with construction timelines.

Community Plan
An overview of the full vision for a neighbourhood, including housing types, amenities, and green spaces.

Mixed-Use
Developments that combine residential homes with commercial, retail, or office spaces.

Sales Centre & Marketing Terms

Builder Incentive
A limited time promotion offered by the builder.

Inventory Home
A home that is already built or under construction and available for quicker possession.

Pre-Construction
A home purchased based on a floor plan before construction is complete, allowing buyers to plan ahead and select finishes early.

Walk-Out Lot
A lot with natural grading that allows for a walk-out basement design.