Some Useful Mortgage Information


Sep 01 2016

What is the difference between a High Ratio and Conventional mortgage?

Saving your home down payment can be an overwhelming and daunting task. A minimum initial investment of 5% of the purchase price is required for any home purchase. However, depending on the size of your down payment and individual situation your lender may require you to obtain additional insurance coverage. A conventional mortgage is one with a down payment of at least 20% of the purchase price.  Alternatively, a high ratio mortgage is one where the down payment is between 5% and 20% and will require the buyer to obtain additional insurance coverage. The premiums for this insurance range depending on individual situations but generally fall between 0.5% and 4%.

What is CMHC?

The Canada Mortgage and Housing Corporation was established in 1946 as a government owned corporation to help Canadians purchase homes during the post-war housing shortage. Their motto: “Committed to housing quality, affordability and choice for Canadians,” illustrates their commitment towards improving our housing market and making it accessible to the majority of Canadians. CMHC provides the loan insurance necessary with a high ratio mortgage; allowing Canadians to purchase their homes sooner and with a lower down-payment. The CMHC Website will provide you with all the resources and information necessary to educate yourself on the various insurances and mortgage structures.

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