Conventional Mortgage
A conventional mortgage is a mortgage loan that does not exceed 80% of the lending value of the property. The lending value is typically the lesser of the property’s purchase price and market value. Your down payment is at least 20% of the purchase price or market value.
High-ratio mortgage
If you contribute less than 20% of the home price as a down payment you will typically need a high-ratio mortgage. This type of mortgage usually requires mortgage loan insurance, of which CMHC is a major provider. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.
A high-ratio mortgage is a mortgage loan higher than 80% of the lending value of the property. This type of mortgage may have to be insured — by CMHC, for example — against payment default.
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