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What is a high-ratio or insured mortgage?

April 26, 2017high-ratio insured mortgage

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What is a high-ratio or insured mortgage?

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A. Whenever you need a mortgage loan that is greater than 80% of the current market appraised value of your home, it is considered a high ratio or insured mortgage. In certain situations, and depending on the property and your credit, you can borrow up to 100% of the value of your home. Canada Mortgage and Housing Corporation (CMHC) and Genworth Financial are the two main insurers in Canada. CMHC and Genworth Financial insure the lender in case you default on your loan. You must pay for this insurance premium, which is usually added to the mortgage requested. The premiums are as follows: 80.01% to 85% = 1.75%. 85.01% to 90% = 2.00% 90.01% to 95% = 2.75% 95.01 to 100% = 3.10% Please note that an extra .20% will be added to the premium for every 5 year increment over and above the traditional 25 year amortization.