Mortgage Insurance
Mortgage Default Insurance, commonly referred to as Mortgage Insurance, allows homebuyers to achieve the dream of homeownership with a low down payment.
There are two types of mortgage options:
In Canada, mortgage insurance is required federally on high-ratio mortgages – that is, mortgages with a down payment of 20 per cent or less. This insurance, which protects the lender in case of borrower default, gives lenders the flexibility to offer borrowers with low down payments the same low interest rates they would offer to homebuyers with more equity.
Mortgage insurance premiums are based on the amount of the mortgage and although they can be paid in a lump sum upon closing, they are normally added to the mortgage amount and paid over the length of the mortgage.
This insurance is not to be confused with mortgage life insurance which protects homeowners and their families in the event of death or illness.
For more information and resources to help understand mortgage insurance and the overall homebuying process, visit www.homeownership.ca
There are two types of mortgage options:
- conventional mortgages - on loans with a minimum 20 per cent down payment
- high-ratio mortgages - on loans with a less than 20 per cent down payment
In Canada, mortgage insurance is required federally on high-ratio mortgages – that is, mortgages with a down payment of 20 per cent or less. This insurance, which protects the lender in case of borrower default, gives lenders the flexibility to offer borrowers with low down payments the same low interest rates they would offer to homebuyers with more equity.
Mortgage insurance premiums are based on the amount of the mortgage and although they can be paid in a lump sum upon closing, they are normally added to the mortgage amount and paid over the length of the mortgage.
This insurance is not to be confused with mortgage life insurance which protects homeowners and their families in the event of death or illness.
For more information and resources to help understand mortgage insurance and the overall homebuying process, visit www.homeownership.ca
Purchase
|
Down Payment Percentage
5% but less than 10% 10% but less than 15% 15% but less than 20% 20% but less than 25% 25% but less than 35% 35% or greater |
Mortgage Insurance Premium
3.60% 2.40% 1.80% 1.25% 0.75% 0.60% |
Please note insurance premiums normally are not applicable when the down payment is 20% or higher for fully income qualifying deals on owner occupied properties however it can depend on your specific situation including the property itself.
