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A postponement agreement, called a priority agreement in some western provinces, is a legal document in which a mortgagee agrees to rank its claim against a property behind another mortgagee's claim, changing the normal order of priority that would otherwise apply based on registration date.
Absent a postponement, priority normally follows registration order — the mortgage registered first on title ranks first on default or sale. A postponement is needed whenever the natural order doesn't match what the parties actually intend, most commonly on a refinance: a new first mortgage replacing an old one would otherwise fall behind an existing second mortgage or HELOC by registration date, unless that second lender agrees to postpone back behind the new first.
For a broker, this comes up whenever a client refinances while a second mortgage or HELOC is still on title: the lawyer needs a signed postponement from the second lender before the new first mortgage can fund with proper priority. It's especially important on private or MIC second-mortgage files, where the lender's priority position directly drives their pricing and risk tolerance.
Priority normally follows registration: absent a postponement or priority agreement, a mortgage or charge registered on title first ranks ahead of one registered later.
Used on refinances with an existing second: refinancing a first mortgage while a second mortgage or HELOC stays on title typically requires the second lender to sign a postponement so the new first mortgage keeps first-ranking priority.
Different name, same concept in the West: Ontario and most provinces call it a postponement agreement; western provinces often use the term priority agreement for the same arrangement.
Registered on title: once signed, the postponement is registered against the property so the revised priority order is reflected in the public land record.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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