TL;DR: A mortgage is a lender’s registered security interest in a property, given as collateral for a debt, that lets the lender force a sale of the property in BC if the borrower fails to pay.
What Is a Mortgage?
A mortgage grants a lender a security interest in property as collateral for a debt. The mortgage is registered against title to the borrower’s property. If the borrower fails to repay what is owed, the lender has legal rights against that property, including the right to enforce the security — ultimately through a court process known as foreclosure.
Interestingly, neither the Law and Equity Act, the Business Practices and Consumer Protection Act, the Property Law Act, nor the Land Title Act contain a definition of “mortgage.” The Land Title Act does define “encumbrance” broadly, capturing mortgages, liens, judgments, Crown debts, and other claims against land — including, separately, claims arising under Nisg̣a’a law against Nisg̣a’a Lands and claims under treaty first nation law against treaty lands. In practice, what most people call a “mortgage” is simply a charge registered against property in favour of a lender to secure repayment of a debt.
“Mortgage” as an Umbrella Term
In everyday use — and increasingly in legal and professional practice — the word “mortgage” is used as a shorthand for a broader category of financial products. What they share is this: a registered security interest in property, held by a lender, that gives the lender rights against that property if the borrower defaults.
The oldest and most familiar form is a term mortgage: a loan for a fixed amount, repaid in scheduled payments of principal and interest over an amortization period. This is what most people picture when they hear the word.
But the term now commonly encompasses several other products:
Home Equity Lines of Credit (HELOCs) are revolving credit facilities secured against the equity in a property. Unlike a term mortgage, a HELOC has no fixed repayment schedule — the borrower can draw on it, repay it, and draw again, up to an approved limit. A HELOC is registered as a charge against the property in the same way as a conventional mortgage.
Hybrid or readvanceable products blend both. A lender may register a single charge that encompasses a fixed-term mortgage component alongside a revolving line of credit component, with borrowing room in the line of credit increasing automatically as the mortgage principal is paid down. These are sometimes called “all-in-one” or “combo” mortgages.
Private mortgages are loans advanced by individuals or private lending companies rather than institutional lenders such as banks or credit unions. They are registered in the same manner as institutional mortgages but vary considerably in their terms. Some include scheduled monthly payments; others are interest-only; still others are “bullet” mortgages, where no payments are made during the loan term and the full balance — including accumulated interest — is repaid in a lump sum at maturity. Private mortgages are common where a borrower does not qualify for institutional financing, needs funds quickly, or needs bridge financing between transactions.
When lawyers, BC Notaries, and lenders use the word “mortgage” without qualification, it is worth clarifying which type of product is involved, because the terms, obligations, and consequences of default can differ significantly between them.
Where Mortgages Are Registered
Most mortgages in BC are registered as charges on title at the Land Title Office, which maintains the provincial registry of interests in land. Registration at the Land Title Office makes the charge enforceable against third parties — including future buyers and other lenders — and establishes the lender’s priority relative to other registered charges.
However, not all property that can be mortgaged is registered at the Land Title Office.
Manufactured homes are personal property under BC law. A security interest in a manufactured home is registered under the Personal Property Security Act (PPSA) in the Personal Property Registry, not at the Land Title Office. The PPSA defines a “security interest” broadly as an interest in goods or other personal property that secures payment or performance of an obligation. A manufactured home loan is therefore a PPSA security agreement rather than a Land Title Act charge — though from the borrower’s perspective, it functions much like a mortgage.
First Nations lands have their own registration systems depending on the governance structure of the First Nation involved. Self-governing First Nations — such as the Nisg̣a’a Nation and the Shíshálh (Sechelt) Nation — have their own land registries, which in some cases mirror or interface with the provincial Land Title and Survey Authority system or the federal Indian land registry. BC Notaries regularly act on transactions involving First Nations lands and are familiar with the applicable registry requirements.
One important limitation applies to reserve lands under the federal Indian Act: a locatee — the holder of a Certificate of Possession in reserve land — cannot directly mortgage that land. Because reserve land is held by the Crown and the locatee holds only a possessory interest, it falls outside the conventional mortgage framework. To arrange financing, the locatee must first lease their interest in the land — including, in some cases, leasing it to themselves — and then mortgage that leasehold interest. The same applies to a non-Indigenous person wishing to acquire and finance a property on reserve: they acquire a leasehold interest in the land, and it is that leasehold interest which can be mortgaged.
All Obligations Mortgages
Most people assume that their mortgage secures only the specific loan they arranged when they purchased or refinanced their home. For many mortgages, that assumption is correct. But some mortgages are registered as all obligations mortgages, and the distinction matters considerably.
An all obligations mortgage is drafted so that the registered charge secures not just the specific loan tied to the mortgage, but all present and future amounts the borrower owes to that lender. In the standard mortgage terms used by BC credit unions, “Obligations” is defined to include all loans, loan indebtedness, costs, and expenses at any time owing by the mortgagor to the lender under any loan or loan document — not only the mortgage itself.
In practical terms, this means that if a borrower has a mortgage, a line of credit, and a credit card all with the same lender, the mortgage charge may secure all three. When the time comes to pay out and discharge the mortgage — whether on a sale or a refinance to a different lender — the lender’s payout statement may include not only the mortgage balance, penalties, and interest, but also any outstanding balances on those other products.
This catches borrowers off guard. A couple on title together may not realize that a line of credit held only by one of them, or a personal loan one of them took out separately, could be captured in the mortgage payout and must be cleared before the lender will provide a discharge. We encourage clients to avoid carrying any other debt with their mortgage lender for exactly this reason — though the advice is easier to give than to follow.
Paying Out and Discharging a Mortgage
When a property is sold or a mortgage is refinanced, the existing mortgage must be paid out and ultimately discharged. These are two separate steps, separated by time.
Step 1 — Ordering the payout statement. Under section 33 of the Property Law Act, a borrower (or their BC Notary or lawyer) can require the lender to provide a payout statement setting out exactly what is owed as of a specified date — typically the completion date of the sale or refinance. The payout statement will include the outstanding principal, accrued interest, any prepayment penalties, and — in the case of an all obligations mortgage — any other amounts the lender is entitled to include.
Step 2 — Paying out the mortgage. On the completion date, the mortgage is paid out from the net sale proceeds or the new financing proceeds, in accordance with the payout statement.
Step 3 — Obtaining and registering the discharge. Once paid out, the lender is required under section 72(2) of the Business Practices and Consumer Protection Act (BPCPA) to provide the borrower with a discharge of the mortgage — registrable under the Land Title Act — within 30 days of full repayment. For a revolving mortgage loan (such as a HELOC), the borrower must also formally request the discharge before the 30-day period begins to run. The lender is not permitted to charge for providing that discharge beyond the prescribed maximum amount — currently $75. However, most standard mortgage terms also contain a clause requiring the borrower to pay all of the lender’s legal costs in connection with the mortgage, and some lenders have begun invoicing separately for legal fees in addition to the statutory discharge fee. There is no prescribed cap on those legal fees, which means the practical cost of obtaining a discharge can exceed what the BPCPA alone would suggest.
It is important to note that this statutory discharge obligation, as written, applies to discharges registrable under the Land Title Act. The BPCPA does not, in its terms, extend the same obligation to security interests registered under the PPSA or to charges over First Nations lands registered under other registry systems. Borrowers with security interests outside the Land Title Office system should confirm the discharge process directly with their lender.
As for how the discharge actually gets registered: lenders used to deliver a signed discharge to the borrower’s BC Notary or lawyer, who would then register it at the Land Title Office. Many institutional lenders now engage third-party service providers — often title insurance companies — to prepare and register discharges on their behalf. When they do, the cost of that service is added to the payout statement. Once registration is complete, the lender (or their service provider) is supposed to notify the borrower’s BC Notary or lawyer. In practice, this notification frequently arrives late — well beyond the 30-day statutory window — and chasing lenders for discharge confirmation is a routine part of post-completion work.
Real-Life Example
Julian and his partner purchase a home together and obtain a mortgage from their credit union. What their BC Notary explains at the signing appointment is that the credit union’s mortgage is an all obligations mortgage: the registered charge secures not just this mortgage, but every debt they owe the credit union, now and in the future.
A few years later, Julian’s partner takes out a personal line of credit with the same credit union. When they eventually sell the home, their BC Notary orders a payout statement under section 33 of the Property Law Act. The statement comes back with two figures: the mortgage balance, and the outstanding line of credit balance — both of which must be repaid before the credit union will provide a discharge.
The discharge itself arrives six weeks after closing — slightly past the 30-day window in the BPCPA — after their BC Notary follows up with the lender.
Frequently Asked Questions
In older BC legal usage, “mortgage” referred to a specific document form. Modern BC conveyancing uses “charge” as the general term for a registered security interest in land. A mortgage is one type of charge. In everyday language the terms are used interchangeably, but technically the charge is what appears on title.
Priority between registered charges is generally determined by the order of registration. A first mortgage is paid out first if the property is sold under enforcement proceedings. A second mortgage — sometimes called a second charge — is repaid from whatever remains. Because second-position lenders carry more risk, they typically charge higher interest rates.
Yes. BC Notaries are authorized to prepare and register mortgages and other charges against property as part of a purchase, refinance, or equity take-out transaction. If you are buying a home or refinancing, a BC Notary can handle the full conveyancing file, including registration of the lender’s charge.
A private mortgage is a loan from an individual or private company rather than a bank, credit union, or other institutional lender. It is registered in the same way as an institutional mortgage. Private mortgages are often used for bridge financing or where a borrower does not qualify under institutional lending criteria. Terms vary widely and should be reviewed carefully with a BC Notary or lawyer before signing.
An all obligations mortgage secures not just the specific loan it was registered for, but all debts the borrower owes to that lender — including lines of credit, credit cards, and other loans. This means the payout amount on a sale or refinance may be higher than the mortgage balance alone.
Paying out a mortgage and registering the discharge are two separate events. Under the BPCPA, the lender has 30 days after full repayment to provide a registrable discharge — and for revolving products like HELOCs, you must formally request the discharge to start that clock. In practice, discharges often arrive late, and your BC Notary or lawyer may need to follow up.
Not directly. Under the Indian Act, a locatee cannot mortgage the land covered by their Certificate of Possession. To arrange financing, they must first lease their interest in the land — sometimes to themselves — and then mortgage that leasehold interest. Self-governing First Nations operate under their own land systems, and the rules vary. A BC Notary familiar with First Nations conveyancing can advise on the applicable process.
Related Terms
- Bare Trust
- Resulting Trust
- Power of Attorney
- Charge on Title (coming soon)
- Collateral Charge (coming soon)
- Conveyancing (coming soon)
- Discharge (coming soon)
- Foreclosure (coming soon)
- Leasehold Interest (coming soon)
- Payout Statement (coming soon)