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.
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.
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.
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.
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.
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.
Low-Down Payment Homebuyers Mortgage
This product provides qualified borrowers with an opportunity to own a home with as little as a 5% down payment.
Purchase Plus Improvements Mortgage
A unique mortgage product that allows qualified borrowers to make their new home just right for them, with tailored improvements, immediately after taking possession of the purchase property. Including these costs within their mortgage.
Vacation Home Mortgage
A vacation home, second home, or cabin. This product allows qualified borrowers to purchase a second property with an affordable monthly payment with 5% down payment.
Investment Property Mortgage
This allows qualified borrowers to purchase a rental property with as little as a 20% down payment.
Cash Back Mortgage
A special mortgage product that allows qualified borrowers with strong credit to take a lump sum of cash, between 1-5%, out upon closing. Certain conditions may apply.
Interest Only Mortgage
A mortgage product where interest only payments are made. With low payments, this frees up cash-flow for other purposes. For example, those who want to access cash for other investment opportunities.
CHIP Reverse Mortgage
A mortgage product designed to help homeowners, over the age of 55, access up to 55% of their home's equity.
A short-term solution, when a borrower experiences a cash-flow disruption. This may include a CRA balance, land purchase, or new construction.
Home Equity Line of Credit (HELOC)
A HELOC lets you leverage your homes equity which allows the homeowner access up to 80% of the homes equity at anytime.
Family Plan Program
This program enables people to help buy a home for immediate family members with as little as 5% down payment.
Self-Employed Borrowing Program
This program is designed for self-employed borrowers who do not have a traditional source of income. This allows eligible borrowers with limited documentation to obtain a mortgage with a 10% down payment.
Spousal/Equity Buyout Program
A unique mortgage product that allows one party to buyout the other parties interest in an existing mortgage. This may apply during a divorce or buying out ones interest in jointly owned property.
Borrowed Down Payment Program
This programs helps make it possible for a qualified borrower with strong credit to borrower the 5% needed to purchase a home.
Qualified homebuyers who have immigrated or relocated to Canada within the last 5 years are eligible to purchase property with as little as a 5% down payment.
New Construction Program
A multi-stage program designed for those looking to build a custom home.