What is a high ratio or insured mortgage?

When you purchase a home in Canada with less than a 20% down payment, it is considered a high ratio or insured mortgage. Canada Mortgage and Housing Corporation (CMHC), Genworth Financial and Canada Guarantee are default insurance companies that protect lenders in the event a borrower defaults on their mortgage. If a borrower stops making their mortgage payment, the insurer will handle the legal proceedings and compensate the lender if there is a loss after the property has been sold. Default insurers charge a one-time insurance premium, included on top of your mortgage amount.

Leave a Reply

Your email address will not be published. Required fields are marked *

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.