Types of Mortgages

The amount you have available for a down payment will determine if you need to apply for a conventional (or low-ratio) mortgage, or a high-ratio mortgage.

If you have less than 20% of the purchase price as your down payment, you will need to apply for a high-ratio mortgage.  A high-ratio mortgage needs to have mortgage protection insurance provided by Canada Mortgage and Housing Corporation (CMHC), Genworth Financial or Canada Guarantee.  You pay the mortgage insurance premiums once (per mortgage) when the mortgage funds are advanced.  You can choose either to pay the premium yourself, or add the funds on top of the mortgage.

If you have 20% or more of the purchase price or the appraised value of the property to use as a down payment, you can apply for a conventional mortgage.  A conventional mortgage usually does not require mortgage protection insurance.

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