Typically, lenders require Mortgage Insurance (also known as mortgage loan insurance) for loans made to anyone that wishes to purchase a home with less than 20% of the purchase price. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 80% of the value of the home or purchases with less than 20% down payment.
Through your lender, Mortgage Insurance enables you to finance up to 95% of the purchase price of a home.
Mortgage Insurance may be a tool for you to get the loan value you require when one or more of the following scenarios fits your situation:
- You are self-employed
- You have saved less than a 20% down payment
- Refinancing to pay off other high interest debt
- You are a newcomer to Canada with permanent resident status
- Purchasing of a property and you want to include the costs of the renovations in the mortgage.
- A purchase ro refinance of a second home