What is a conventional and high ratio mortgage?
A conventional mortgage is where the buyer provides a down payment of 20% of the purchase price. In other words the mortgage may not exceed 80% of loan to value. Mortgages that exceed this limit are called High ratio mortgages.
High ratio mortgage is when the borrower has a down payment of less than 20% of the purchase price. Thus resulting in a loan to value higher than 80% and may go up to 95% with certain lenders. Once the loan is a high ratio mortgage there is an insurance fee that is set by one of these three default insurance companies CMHC, Genworth Financial, Canada Guarantee which will be done by the lender and rolled into your mortgage. High ratio mortgage allows for those who can only put 5 % down to own a home faster or buy a better home for a higher price; thus opening our market to more people.
For more information and any mortgage inquiries do not hesitate to contact me:
Robert Clancy, AMP,
VERICO Safebridge Mortgage Solutions
SAFEBRIDGE Financial Group
Tel: 416 899-1467
Fax: 1866 385-4049