MORTGAGE TYPES

Not all mortgages are created equal. While there are Fixed, Variable, and Adjustable Mortgage Rates, Open and Closed Terms, it all comes down to whether or not the mortgage loan is insured through one of the three mortgage loan insurers in Canada.

Insured Mortgage

If you are purchasing a home with a down payment of less than 20.00%, the lender will require the mortgage loan to be insured. This allows homebuyers to get a mortgage with as little as a 5.00% down payment. This protects the lender in the event a borrower ever stopped making payments and defaulted on their mortgage. This insurance costs the homebuyer a premium between 2.80% – 4.50% which is built into their mortgage balance.

Conventional Mortgage

If you are purchasing a home with a down payment of 20.00% or more, mortgage loan insurance is not required. Conventional mortgages fall into two subcategories, Insurable and Uninsurable. 

Insurable

An insurable mortgage is when the borrower is purchasing a home with a 20.00% or more down payment, avoiding the insurance premium. The lender will often get the mortgage insured, however, this costs the lender instead of the home buyers. Some lenders will base their lending policy on whether or not the mortgage can be insured to reduce their risk.

Uninsurable

An uninsurable mortgage is when the borrower purchasing a home does not qualify under the the insurer guidelines. This increases the risk for the lender and a larger down payment may be required.

Mortgage Products

There are a wide variety of mortgage products. Each lender will have unique terms and conditions that apply to one type of mortgage but not necessarily another. Determining which mortgage suits your needs and goals is our job. We sort through all the options and secure the best mortgage for you.

Below are just a few different mortgage products available in Canada. While most of these products and programs apply when purchasing a home, there are unique products available for those who are renewing or refinancing that may benefit you.