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What is a High-Ratio Mortgage In Canada?

November 7, 2018

A high-ratio mortgage applies to people that have less than 20% of a down payment to put towards the purchase of a home. In these cases, you must qualify for mortgage insurance through one of three insurers – Genworth, CMHC or Canada Guaranty

You can qualify for up to 95% of your home’s value based on the following criteria:

How to calculate your minimum down payment?

Typically a minimum down payment is starting at 5%. For a purchase price of $500,000 or less, the minimum down payment is 5%. When the purchase price is above $500,000 and under $1,000,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion.

The cost of the insurance premium (a fee) is incorporated into your mortgage payments and varies based on your down payment:

How does this benefit consumers?

High-Ratio mortgages allow first-time home buyers the opportunity to own a home assuming they have good credit and steady income; but do not have a big down payment available.

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