What is a high ratio or insured mortgage by CMHC or GENWORTH?
A High-Ratio mortgage is one where the amount that is borrowed for the mortgage is greater than 80% of the purchase price or appraised value (whichever is less). High-Ratio mortgages require Mortgage Loan Insurance which is provided by CMHC, GENWORTH or a private insurer. The Mortgage Loan Insurance premium is paid to CMHC or GENWORTH and provides insurance to the lender in the even the mortgage is not repaid and the bank has to foreclose on the property. This benefits the borrower because it allows them to purchase a home with less than 25% down payment. The insurance premium is paid by the borrower and is normally added onto the mortgage. It is not the same as Mortgage Life Insurance. The premiums range from .50% – 2.9% depending on the loan to value and product chosen.
A High-Ratio mortgage is one where the amount that is borrowed for the mortgage is greater than 75% of the purchase price or appraised value (whichever is less). High-Ratio mortgages require Mortgage Loan Insurance which is provided by CMHC, GENWORTH or a private insurer. The Mortgage Loan Insurance premium is paid to CMHC or GENWORTH and provides insurance to the lender in the even the mortgage is not repaid and the bank has to foreclose on the property. This benefits the borrower because it allows them to purchase a home with less than 25% down payment. The insurance premium is paid by the borrower and is normally added onto the mortgage. It is not the same as Mortgage Life Insurance. The premiums range from 2.90% – 0.50 depending on the loan to value and product chosen.
