What is a high-ratio mortgage?
A A High-ratio mortgage is a mortgage loan higher than 80% of the lending value of the property. If you contribute less than 20% of the home price as a down payment — and as little as 5% — you will need a high-ratio mortgage. This type of mortgage usually requires mortgage loan insurance, which is available from CMHC or a private company. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.
A High-Ratio mortgage is one where the amount to be borrowed by way of a mortgage is greater than 75% of the purchase price, or the appraised value, whichever is less. High-Ratio mortgages generally require Mortgage Loan Insurance provided by either Canada Mortgage and Housing Corporation (CMHC) or Genworth, a private Insurer. The Mortgage Loan Insurance premium is paid to CMHC or Genworth and protects the Lender in the event the mortgage is not repaid and the bank has to take back the property. The benefit to the borrower is that it allows them to purchase a home with less than 25% down payment. The insurance premium is paid by the borrower and can be added directly onto the mortgage.
A High-Ratio mortgage is one where the amount to be borrowed by way of a mortgage is greater than 80% of the purchase price, or the appraised value, whichever is less. High-Ratio mortgages generally require Mortgage Loan Insurance provided by either Canada Mortgage and Housing Corporation (CMHC) or Genworth, a private Insurer. The Mortgage Loan Insurance premium is paid to CMHC or Genworth and protects the Lender in the event the mortgage is not repaid and the bank has to take back the property. The benefit to the borrower is that it allows them to purchase a home with less than 20% down payment. The insurance premium is paid by the borrower and can be added directly onto the mortgage. Mortgage Loan Insurance premiums range from .50% to 3.10% of the mortgage amount and are calculated based on the overall loan to value. For instance, borrowers with a 5% down payment, a loan to value of 95%, would pay a premium of 2.75% while those with a 20% down payment, a loan to value of 80%, would p
A. A high-ratio mortgage is one where the amount to be borrowed is greater than 80% of the purchase price or appraised value. High-ratio mortgages generally require mortgage loan insurance provided by either CMHC, a crown corporation or Genworth, a private insurer. The mortgage loan insurance premium paid to CMHC or Genworth protects the lender in case of default in the event the mortgage is not repaid, and the bank has to take back the property. The benefit to the borrower is that they can purchase a home with less than 20% down, to as low as 5% down. The insurance premium is paid by the borrower and can be added directly into the mortgage amount. This is not the same as mortgage life insurance.
