High Ratio Mortgages

Less Than 20% Down

When you require a mortgage loan greater than 80% of the property value, under the legislated Canadian National Housing Act (NHA), you must obtain a "high-ratio" form of default insurance.

A high ratio mortgage is one that exceeds 80% LTV (Loan to Value) of the appraisal or property price, whichever is less. A High Ratio Mortgage, or insured mortgage as they are sometimes referred to, are considered riskier than conventional mortgages as there is a reduced amount of equity available for the lenders security should the borrower default on the mortgage payments.

As a result of this higher risk, in Canada, all of the traditional mortgage lenders are required to insure all of their mortgage loans that exceed the conventional mortgage maximums of 80% LTV. The mortgage default indurance providers in Canada are CMHC, GE, and AIG.

To learn more about Mortgage Default Insurance, please visit the Mortgage Info tab on the main menu.