Jennifer, a self-employed individual in Ottawa, has just registered a collateral charge mortgage for $800,000 on her property, which is valued at $1.2 million. However, she only initially borrowed $500,000. Six months later, she needs an additional $100,000 for her business. What is the most efficient way for her to access these funds, considering the existing mortgage structure?

Question: Jennifer, a self-employed individual in Ottawa, has just registered a collateral charge mortgage for $800,000 on her property, which is valued at $1.2 million. However, she only initially borrowed $500,000. Six months later, she needs an additional $100,000 for her business. What is the most efficient way for her to access these funds, considering the existing mortgage structure?

Answer options:

• She must refinance her entire $500,000 mortgage to a new standard charge. ✅ She can take an advance on her existing collateral charge up to the registered $800,000 limit, typically without new legal fees for the charge itself.
• She needs to apply for a second mortgage with a completely new lender.
• She must pay off her current $500,000 mortgage in full and then apply for a new, larger mortgage.

Correct answer: She can take an advance on her existing collateral charge up to the registered $800,000 limit, typically without new legal fees for the charge itself.

Explanation: With a collateral charge mortgage, the borrower can access additional funds (future advances) up to the originally registered amount ($800,000 in this case) without incurring new legal fees for re-registering the charge, making it an efficient way to borrow more.