GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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50% - Moderately

Point


Synonyms:one percent, percent, percentage point, single percentage point
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of point

point
1. A point equals one point of a percent on a mortgage loan. Some lenders charge "origination points" to cover the expenses of making a loan. Some borrowers pay "discount points" to reduce the loan's interest rate.

Related Terms and Acronyms:

  • basis point (BPS)   A unit of measure: 1/100th of one percent. For example, the difference between a 9.0% loan and a 9.5% loan is 50 basis points.
      ➥  Used by mortgage brokers and lenders when discussing mortgage rates and determining commissions.
  • buy-down   When a borrower or a mortgage broker "buys down" a mortgage rate, they make an upfront payment to the lender in order to lower the mortgage rate. A similar effect can be achieved by making a lump sum payment at the beginning of a mortgage term.
  • buy-down mortgage   A home loan in which the lender charges below-market interest in exchange for discount points.
  • discount point   A sum a borrower pays to a lender to decrease the interest rate of a mortgage. A point equals 1 percent of the loan amount.
  • interest rate (IR)   The rate a lender charges an individual to borrow money.
  • Mortgage Broker (MB)   One who finds clients perspective lenders at generally no cost. Mortgage Brokers have a special relationship with lenders and can offer their clients the best rates and service. CanEquity goes through great lengths to ensure you are serviced by the best Mortgage Brokers in Canada.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • pre-paid interest   Interest that a borrower pays before it is due, usually to save taxes.
  • rate   Percentage a borrower pays for the use of money, usually expressed as an annual percentage.
  • spread   The difference between the interest rate charged to borrowers and the interest rate paid to depositors.

More Related Terms and Acronyms

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