Document background
The Mortgage Principal Agreement serves as the primary legal instrument for securing loans against real property in Canada. This document is essential when a borrower seeks financing for property acquisition or refinancing, whether for residential or commercial purposes. The agreement must comply with federal legislation such as the Interest Act and Bank Act, as well as provincial property and consumer protection laws. It contains comprehensive details about the loan terms, security arrangements, obligations of all parties, and enforcement mechanisms. The Mortgage Principal Agreement is particularly crucial as it creates a legally enforceable security interest in the property, protecting the lender's interests while clearly defining the borrower's obligations and rights. It forms the foundation of the lending relationship and is typically registered against the property title in the appropriate land registry system.
