Conventional or high-ratio

A conventional mortgage is a loan for no more than 80% of the appraised value or purchase price of the property, whichever is less. The remaining amount required for a purchase (20%) comes from your resources and is referred to as the down payment. If you have to borrow more than 80% of the money you need, you’ll be applying for what is called a high-ratio mortgage. Here’s how a high-ratio mortgage works: Any purchase where the down payment is between 5% and 19% is considered a high-ratio mortgage, and the mortgage must be insured by the Canada Mortgage and Housing Corporation (CMHC), GENWORTH or AIG. The insurer will charge a fee for this insurance. The amount of the fee will depend on the amount you are borrowing and the percentage of your own down payment. Typical fees range from 1.09% to 3.09% of the principal amount of your mortgage. This amount can be paid up front or added to the principal portion of your mortgage. A Mortgage Advisor can help you determine the exact amount.

Remember to ask about our insurance to protect your loved ones while your mortgage is in effect.