Chattel Loan

A chattel loan is financing secured by a movable asset — called a chattel — rather than by land. In Canada, it is most often used for a manufactured home that sits on leased land or is not permanently affixed to a foundation, so the lender takes security in the home itself instead of registering a mortgage on real property.

How a chattel loan differs from a mortgage

A standard mortgage is secured by real property: the land and anything permanently attached to it. When a home is permanently affixed to land that the borrower owns, lenders usually register a mortgage or charge on title. A chattel loan works differently. Because the manufactured home is treated as personal property, the lender typically registers its interest in a provincial personal property registry, such as under a Personal Property Security Act (PPSA), rather than on the land title.

Chattel loans often have shorter amortization periods, higher interest rates, and different renewal or prepayment terms than residential mortgages. Lenders may also require a larger down payment because a manufactured home can depreciate and is easier to move or repossess. Some chattel loans may be eligible for mortgage default insurance if they meet the insurer’s criteria, but eligibility rules are specific and should be confirmed with the lender or insurer.

Why it matters to a borrower

If you are buying a manufactured home on leased land, you may not qualify for a standard mortgage even if you have good credit. The lender’s security is the home, not the land, so underwriting focuses on the home’s value, the land lease or pad rental, and your ability to pay. Lenders still look at income, credit score, and debt service ratios, but the terms can be less favourable than a mortgage on owned land.

Costs do not disappear because the loan is a chattel loan. You may still pay property tax, property insurance, pad rent, and possibly a land transfer tax or registration fees depending on the province and whether land is included. Read the cost of borrowing disclosure and compare the total cost, not just the payment.

Mortgage on land vs chattel loan

Feature	Mortgage on real property	Chattel loan
Security	Land and permanently affixed home	Movable asset, such as a manufactured home
Registration	Land title office	Provincial personal property registry
Typical term	Common residential mortgage terms	Often shorter terms or amortizations
Default remedy	Foreclosure or power of sale	Repossession or seizure of the chattel

If the home later becomes permanently affixed to land you own, ask a lender whether it can be refinanced as a traditional mortgage. That may change the rate and terms, but it depends on title, zoning, and the lender’s rules.