What to Do When You’re Approved

You will need to sign the Mortgage Loan Agreement (the MLA). The MLA outlines the specific terms and conditions of your loan. For example, the MLA will describe your interest rate, term, payment information and whether the mortgage is open or closed to prepayment. These terms and conditions are the written version of what you agreed to during the application process.

It’s important to know that:

• With a fixed interest rate MLA, the interest rate is fixed for the term you have agreed to and cannot be changed except by way of amendment;
• With a variable interest rate MLA, the interest rate will change whenever TD Mortgage Prime Rate changes for the term you have agreed to and the equation for the rate cannot be changed except by way of amendment.

You will need to sign the TD Home Equity FlexLine Agreement (the “Agreement”). The Agreement outlines the specific terms and conditions of your TD Home Equity FlexLine. For example, the Agreement will describe your interest rate and payment information. These terms and conditions are the written version of what you agreed to during the application process.

Once the MLA is signed by all the required borrowers (and a guarantee is signed by any applicable guarantors), the collateral charge will be signed either with your solicitor or, if you have chosen to use our in-house registration program, at your TD Canada Trust branch. The collateral charge is the security that the bank has in exchange for lending you the money set out in the MLA. It is registered against the real estate you are refinancing.

After a discussion with your TD Mortgage Specialist, you may have decided to have your collateral charge registered for more than the amount of money you are actually borrowing at this time. If you are using a solicitor to register your new collateral charge, it is important that you discuss any additional associated costs/fees with him/her that may occur because of the higher registration amount prior to funding your mortgage loan.

You’ll notice that the interest rate in the MLA is different from the interest rate on the collateral charge.

The MLA sets out the specific terms and conditions of your loan.

The collateral charge secures your loan and is registered at TD Prime Rate + 10%. This is the maximum rate of interest for which TD Canada Trust is secured. As you’ll see, this interest rate can give you greater flexibility and cost savings in the future.

While the interest rate on the collateral charge may be different than the interest rate in the MLA, you can only be charged interest based on the MLA interest rate.

For example, if your MLA has a fixed interest rate of 5% per annum, then even though the collateral charge contains a different rate, you can only be charged interest at 5% per annum, before or even after default.

If you have an existing TD Mortgage or TD Home Equity FlexLine secured by a collateral charge, you may be able to reuse the existing collateral charge for future borrowings and avoid incurring additional costs of registering a new charge on the property.

Why are there two agreements?
Let us explain.

There are benefits to having two agreements, a Mortgage Loan Agreement and a collateral charge.

Having a Mortgage Loan Agreement and a collateral charge can be useful if you ever want to change your loan. For example, if you wanted to switch from a mortgage loan to a TD Home Equity FlexLine in the future, you could reuse the existing collateral charge as security for the new TD Home Equity FlexLine without incurring any new registration fees.

If you have registered the collateral charge for a higher amount than your current loan agreement, then if you want to borrow a higher amount in the future, you may be able to reuse the existing collateral charge, subject to credit approval. You could also save money at that time by not incurring the cost of registration fees for a new collateral charge on the property.

Some conditions may apply when reusing your collateral charge, so please discuss this with your TD Mortgage Specialist.

Once the Agreement is signed by all the required borrowers, the collateral charge will be signed either with your solicitor or, if you have chosen to use our in-house registration program, at your TD Canada Trust branch. The collateral charge is the security that the bank has in exchange for lending you the money set out in the Agreement. It is registered against the real estate you are either buying or refinancing.

After a discussion with your TD Mortgage Specialist, you may have decided to have your collateral charge registered for more than the amount of money you are actually borrowing at this time. If you are using a solicitor to register your new collateral charge, it is important that you discuss any additional associated costs/fees with him/her that may occur because of the higher registration amount prior to finalizing the collateral charge.

You’ll notice that the interest rate in the Agreement is different from the interest rate on the collateral charge.

The Agreement sets out the specific terms and conditions of your TD Home Equity FlexLine.

The collateral charge secures your TD Home Equity FlexLine and is registered at TD Prime Rate + 10%. This is the maximum rate of interest for which TD Canada Trust is secured. As you’ll see, this interest rate can give you greater flexibility and cost savings in the future.

While the interest rate on the collateral charge may be different than the interest rate in the Agreement, you can only be charged interest based on the Agreement interest rate.

For example, if your Agreement has an interest rate of TD Prime Rate + 1% per annum, then even though the collateral charge contains a different rate, you can only be charged interest at TD Prime Rate + 1% per annum, before or even after default.

If you have a Term Portion – Fixed Rate as part of your TD Home Equity FlexLine, your interest rate for that portion is fixed for the duration of the term you have agreed to and cannot be changed except by way of amendment. If you choose a Term Portion – Variable Rate, your interest rate will fluctuate with changes to TD Prime Rate for the duration of the term you have agreed to.

If you have an existing TD credit facility secured by a collateral charge, you may be able to reuse the existing collateral charge for future borrowings and avoid incurring additional costs of registering a new charge on the property.

Why are there two agreements?
Let us explain.

There are benefits to having two agreements, a TD Home Equity FlexLine Agreement and a collateral charge.

Having a TD Home Equity FlexLine Agreement and a collateral charge can be useful if you ever want to change your credit facility.

For example, if you wanted to switch from a TD Home Equity FlexLine to a mortgage loan in the future, you could reuse the existing collateral charge as security for the mortgage loan without incurring any new registration fees. If you have registered the collateral charge for a higher amount than your current Agreement, then if you want to borrow a higher amount in the future, you may be able to reuse the existing collateral charge, subject to credit approval. You could also save money at that time by not incurring the cost of registration fees for a new collateral charge on the property. Some conditions may apply when reusing your collateral charge, so please discuss this with your TD Mortgage Specialist.

After you have received the funds, we will send you a Mortgage Repayment Letter. This Mortgage Repayment Letter will give you a summary of your mortgage details, such as the mortgage principal amount, payment amount and important dates. It will also update you with any changes that may have occurred and that you agreed to. Keep it with your important papers for future reference.

If you set up a Fixed Rate Portion on your TD Home Equity FlexLine, we will send you a Fixed Rate Portion Repayment Letter. This Fixed Rate Portion Repayment Letter will give you a summary of your Fixed Rate Portion details, such as the Fixed Rate Portion principal amount, payment amount and important dates. It will also update you with any changes that may have occurred and that you agreed to. Keep it with your important papers for future reference.