Collateral Charge
Quick Summary
A mortgage registration that can secure more than your current loan amount.
ELI5 Explanation
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It’s like registering a bigger “security blanket” on title than what you owe today.
Detailed Explanation
Some lenders register a collateral charge for an amount higher than the initial mortgage, which can make it easier to borrow more later with the same lender. The tradeoff is that switching lenders at renewal can be harder or more expensive because the charge often needs to be discharged and re-registered.
Example
A $500,000 mortgage is registered as a $650,000 collateral charge, allowing future increases without a full new registration (subject to lender approval).
Why It Matters
It affects portability, refinance options, and the true friction of switching lenders.