Buyers and Sellers will negotiate the principal amount of the Vendor Take-Back Mortgage, with the Seller typically wanting to limit the risk with a sizeable payment of cash on closing. Although not always the rule, in our experience, Sellers will not usually want to accept a Vendor Take-Back Mortgage for more than 50-60% of the purchase price. The Seller will also usually require a commercially competitive (or better) interest rate with principal and interest payments on a particular schedule. Interest-only payments are sometimes made, but this increases the risk and a Seller may want a higher rate of interest in these circumstances. The terms of the Vendor Take-Back Mortgage must be set depending upon the Buyer’s and the Seller’s needs. Other typical terms allow the Buyer to pay off the mortgage in full at any time without penalty, and restrict the Buyer from assigning the Mortgage to a new owner, i.e. a provision confirming that it is not an assumable mortgage. A Vendor Take-Back Mortgage should also be registered in the first position with no or very limited postponement rights or partial discharge provisions. Other terms are negotiated depending upon the parties’ needs.