Insuring Your Loan to Reduce Your Downpayment

As a general rule, when you purchase a home, you must make a minimum downpayment equivalent to 25% of the purchase price of the property. A conventional mortgage loan cannot exceed 75% of the price.

However, if you cannot pay this amount, you can obtain a high-ratio mortgage loan by purchasing mortgage loan insurance from the Canada Mortgage and Housing Corporation (CMHC) or GE Mortgage Insurance Canada. The lender will take care of making the request. In this way, you may obtain a mortgage loan of up to 100% of the purchase price or the market value of the property you wish to purchase.

Who pays the insurance premium to CMHC or GE Mortgage Insurance Canada?

The borrower pays the premium, which is generally added to the loan amount.

For further information

GE Mortgage Insurance Canada
Private insurer of mortgage loans.

Canada Mortgage and Housing Corporation (CMHC)
Crown corporation offering mortgage loan insurance products.