So what is a Mortgage, LOC, RRSP, TFSA and all these other things!

Whenever you borrow, the pattern is the same. The lender gives you money today, and you promise to pay it back later plus extra for the privilege. That extra is called interest.

The principal is the amount you actually borrowed. The interest rate tells you how expensive the loan is, shown as a percentage per year. A 5% annual rate on $1,000 means you pay roughly $50 in interest over a full year if nothing is paid back.

The term is how long your current deal lasts. A five-year mortgage term means your rate and rules are locked in for five years, even though you may need twenty-five years to pay the whole thing off.

Amortization is the total length of time it would take to pay the loan to zero with regular payments. A 25-year amortization means 25 years of equal monthly payments, assuming you never change the deal.

A mortgage is simply a loan used to buy real estate. The house is the collateral: if you stop paying, the lender can take it through foreclosure. That is why mortgage rates are lower than most other loans — the lender has something concrete to sell if things go wrong.

A line of credit, or LOC, is a pool of money you can dip into when you need it. You only pay interest on what you actually use. A home equity line of credit, or HELOC, is a LOC secured by your house, so the rate is usually lower than an unsecured LOC.

A loan is usually a fixed amount with a fixed repayment schedule. A credit card is also a loan, but it is designed to be paid off every month; if you carry a balance, the interest rate is often 20% or more.

A chequing account is for daily money: pay goes in, bills go out. It pays almost no interest. A savings account pays a little interest and is meant for money you will not touch right away.

A high-interest savings account, or HISA, is a savings account that pays more than a regular one, often at an online bank. It is a good place for an emergency fund or a near-term goal.

A GIC, or Guaranteed Investment Certificate, is a promise: you lock your money away for a set time, and the bank pays you a guaranteed rate. It is safe but not very flexible — you usually pay a penalty if you take the money early.

Interest is the reward for lending your money to a bank or bond issuer. Compound interest means you earn interest on your interest, so small amounts can grow surprisingly large over time. That same force works against you when you carry debt.

A stock, or share, is a small ownership slice of a company. If the company does well, the share price may rise and the company may pay you a dividend, which is a share of its profits.

A bond is a loan you make to a government or company. They pay you interest and return your principal at the end. Bonds are generally steadier than stocks but usually grow more slowly.

A mutual fund is a basket of investments managed by a company. You buy units of the fund, and the fund company decides what to hold. An ETF, or exchange-traded fund, is similar but usually has lower fees and trades on the stock exchange like a stock.

An index fund is a fund that simply tries to match the market rather than beat it. Because it does not pay a manager to pick winners, the cost — called the MER, or management expense ratio — is usually very low.

Dollar-cost averaging means investing the same amount regularly, no matter what the market is doing. It automatically buys more when prices are low and less when prices are high, which removes the pressure of trying to time the market.

Rebalancing means bringing your portfolio back to your planned mix. If stocks have done very well and now make up 80% of your portfolio instead of your target 60%, you sell some stocks and buy bonds or cash to restore the balance.

Canada offers special accounts that come with tax breaks. Think of them as gift wrap from the government: the rules are strict, but the tax savings are real.

A TFSA, or Tax-Free Savings Account, lets your money grow tax-free, and you can take it out any time without paying tax. You do not get a tax break when you put money in, but everything that comes out is yours to keep. It is not just a savings account — you can hold stocks, ETFs and GICs inside it.

An RRSP, or Registered Retirement Savings Plan, gives you a tax deduction now. The money grows tax-free while inside the plan, but you pay tax when you withdraw it in retirement. The idea is that you are in a higher tax bracket while working and a lower one when retired.

An FHSA, or First Home Savings Account, combines the best of both: a tax deduction when you contribute, and tax-free withdrawal when you buy your first home. It is designed specifically for saving a down payment.

An RESP, or Registered Education Savings Plan, is for a child's post-secondary education. Your contributions are not tax-deductible, but the government adds grants — the main one is the Canada Education Savings Grant, or CESG — and the growth is taxed in the student's hands, usually at a very low rate.

A RRIF, or Registered Retirement Income Fund, is what most people convert their RRSP into by the end of the year they turn 71. You can no longer contribute, and you must withdraw a minimum amount each year. It is how you turn a retirement nest egg into retirement paycheques.

CPP, the Canada Pension Plan, is a public pension you pay into through your paycheque. How much you receive in retirement depends on how much and how long you contributed. You can start taking it as early as 60 or as late as 70; waiting increases the monthly amount.

OAS, or Old Age Security, is a basic pension the government pays to most Canadians 65 and older who have lived in Canada long enough. Unlike CPP, it is not tied to your work contributions.

GIS, the Guaranteed Income Supplement, is extra money for low-income seniors who receive OAS. If your retirement income is modest, GIS can make a meaningful difference.

Together, CPP, OAS and GIS are often called the 'government triad' of retirement income. They are designed to cover basics, not to fund a lavish lifestyle, which is why personal savings in a TFSA, RRSP, pension or non-registered account still matter.

Income tax in Canada works in brackets. Only the income inside each bracket is taxed at that rate. Going up a bracket does not mean all your income is taxed more — just the dollars that crossed the line.

A tax deduction reduces the income you are taxed on. RRSP contributions are a common deduction. A tax credit reduces the tax you owe directly. Donations and medical expenses often give tax credits.

GST is the federal goods and services tax, 5% in most places. PST is a provincial sales tax. HST is when a province combines the federal and provincial tax into one charge. QST is Quebec's provincial sales tax. The price on the shelf does not include these; they are added at the till.

Your marginal tax rate is the rate you pay on your next dollar of income. Your average tax rate is the total tax you paid divided by your total income. The marginal rate is what matters when you are deciding whether to earn more, contribute to an RRSP, or take a capital gain.

The down payment is the part of the home price you pay upfront. In Canada, the minimum is 5% on the first $500,000, 10% on the next $500,000, and 20% on anything above $1.5 million.

If your down payment is less than 20%, you need default insurance, often called CMHC insurance even though Sagen and Canada Guaranty also offer it. The premium is added to your mortgage balance, not paid in cash on closing day.

Closing costs are all the extra bills that arrive when you buy a home: legal fees, land transfer tax, title insurance, a home inspection, an appraisal and adjustments for taxes the seller already paid. In big cities these can easily add $15,000 to $40,000.

Land transfer tax is a provincial tax on property purchases. Some cities, notably Toronto, charge an additional municipal land transfer tax on top of the provincial one.

Principal residence is the home you live in most of the time. When you sell it, the gain is usually tax-free in Canada. If a property is not your principal residence, you may owe capital gains tax on the profit.

An emergency fund is cash set aside for surprises: a job loss, a car repair, a broken furnace. A common rule is three to six months of essential expenses in a HISA.

Life insurance pays money to your beneficiaries when you die. Term life insurance covers you for a set number of years and is usually the cheapest way to protect dependents. Permanent life insurance lasts your whole life and often includes a savings component.

Disability insurance replaces part of your income if you cannot work due to illness or injury. Many people ignore it, but for most working-age people the risk of disability is higher than the risk of death.

Critical illness insurance pays a lump sum if you are diagnosed with a covered serious condition. Home insurance covers your house and belongings. Tenant, or renters, insurance covers your belongings and liability if you rent.

A will says what happens to your assets when you die. A beneficiary is the person named to receive an asset, such as a life insurance payout or the balance of a TFSA. A power of attorney lets someone manage your affairs if you cannot.

An asset is something you own that has value: cash, investments, a home, a car. A liability is something you owe: a mortgage, student loan, credit card balance or line of credit.

Net worth is your assets minus your liabilities. It is the simplest measure of financial health, even though it does not tell the whole story.

A budget is just a plan for your money. It shows what is coming in and where you want it to go. Pay yourself first means putting savings away before you spend on anything else, even if it is a small amount.

Inflation is the gradual rise in prices over time. At 2% inflation, something that costs $100 today will cost about $102 next year. Inflation reduces the buying power of cash, which is why long-term savings usually need to be invested, not just parked.

Liquidity means how quickly you can turn something into cash without losing value. Cash in a savings account is very liquid. A house is not liquid at all — selling it takes months.

A credit score is a three-digit number based on your borrowing history. Paying on time and using less of your credit limit raises it. Late payments and high balances lower it.

Direct deposit means money is sent straight into your bank account, usually your pay or a government benefit. An e-Transfer lets you send money to another person using their email or phone number.

A void cheque is a cheque with VOID written across it. It is used to give someone your bank account details safely, because it cannot be cashed.