Why are the registered principal and interest of the mortgage higher than the agreed upon numbers?

Collateral Mortgages typically have a registered principal amount and interest rate that are higher than the agreed upon principal and interest. In other words, the bank will register the mortgage in a higher amount with a higher interest rate. For example, TD usually registers Prime Rate plus 10%, RBC registers Prime Rate plus 7%, and CIBC registers Prime Rate plus 6%.

In these circumstances, the bank is only entitled to collect the agreed-upon principal and interest and not the higher rate that is registered on title.

Banks sometimes register the higher principal and interest to disincentivize a subsequent lender from advancing funds on a second mortgage and to permit themselves to advance additional funds without having to register a new mortgage in the event they decide to do so.