Canada Interest Act
July 30, 2008
Excerpts from the Act, Section Numbers are as in the Act, references are omitted, emphasis added.
RATE OF INTEREST
2. Except as otherwise provided by this or by any other Act of the Parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatever,any rate of interest or discount that is agreed upon. [But see the Criminal Code, not over 60%]
3. ... whenever any interest is payable by the agreement of parties or by law, and no rate is fixed by such agreement or by law, the rate of interest shall be five per cent per annum.
4. Except as to mortgages on real estate, whenever any interest is, by the terms of any written or printed contract, whether under seal or not, made payable at a rate or percentage per day, week, month, or at any rate or percentage for any period less than a year, no interest exceeding the rate or percentage of five per cent per annum shall be chargeable, payable or recoverable on any part of the principal money unless the contract contains an express statement of the yearly rate or percentage of interest to which such other rate or percentage is equivalent.
5. If any sum is paid on account of any interest not chargeable, payable or recoverable under section 4, such sum may be recovered back or deducted from any principal or interest payable under such contract.
INTEREST ON MONEYS SECURED BY
MORTGAGE ON REAL ESTATE
6. Whenever any principal money or interest secured by mortgage of real estate is, by the mortgage, made payable on the sinking fund plan, or on any plan under which the payments of principal money and interest are blended, or on any plan that involves an allowance of interest on stipulated repayments, no interest whatever shall be chargeable, payable or recoverable, on any part of the principal money advanced, unless the mortgage contains a statement showing he amount of such principal money and the rate of interest thereon, calculated yearly or half-yearly, not in advance.
7. Whenever the rate of interest shown in the statement mentioned in section 6 is less than the rate of interest that would be chargeable by virtue of any other provision, calculation or stipulation in the mortgage, no greater rate of interest shall be chargeable, payable or recoverable, on the principal money advanced, than the rate shown in such statement.
8. (1) No fine or penalty or rate of interest shall be stipulated for, taken, reserved or exacted on any arrears of principal or interest secured by mortgage of real estate, that has the effect of increasing the charge on any such arrears beyond the rate of interest payable on principal money not in arrears.
(2) Nothing in this section has the effect of prohibiting a contract for the payment of interest on arrears of interest or principal at any rate not greater than the rate payable on principal money not in arrears.
9. If any sum is paid on account of any interest, fine or penalty not chargeable, payable or recoverable under section 6, 7 or 8, such sum may be recovered back, or deducted from any other interest, fine or penalty chargeable, payable or recoverable on the principal.
10. (1) Whenever any principal money or interest secured by a mortgage of real estate is not,under the terms of the mortgage, payable until a time more than five years after the date of the mortgage, then, if at any time after the expiration of such five years, any person liable to pay or entitled to redeem the mortgage tenders or pays, to the person entitled to receive the money, the amount due for principal money and interest to the time of payment, as calculated under sections 6 to 9, together with three months further interest in lieu of notice, no further interest shall be chargeable, payable or recoverable at any time thereafter on the principal money or interest due under the mortgage.
(2) Nothing in this section applies to any mortgage upon real estate given by a joint stock company or other corporation, nor to any debenture issues by any such company or corporation, for the payment of which security has been given by way of mortgage on real estate.
Sections 11 to 15 omitted.