Document background
The Purchase Money Mortgage Agreement is a crucial document in Canadian real estate transactions where traditional bank financing is not used, and the property seller provides direct financing to the buyer. This arrangement is common in situations where buyers may not qualify for conventional mortgage financing or when sellers wish to generate ongoing income through interest payments. The agreement must comply with Canadian federal legislation including the Interest Act and Bank Act, as well as provincial property laws and consumer protection regulations. The document typically includes detailed terms about the loan amount, interest rate, payment schedule, security provisions, default remedies, and property maintenance requirements. Purchase Money Mortgage Agreements are particularly important in private sales, commercial real estate transactions, and property development projects where seller financing provides flexibility in deal structuring.
