A high ratio mortgage, as opposed to a conventional mortgage, is one in which the Loan to Value Ratio (LTV) is greater than 80%. When a down payment of less than 20% is made on a mortgage, insurance will be required.
The following is a breakdown of the applicable insurance premiums depending on the loan to value ratio (LTV), for high-ratio mortgage loans offered for programs through both CMHC and Genworth Financial:
|Loan to Value High Ratios (LTV)||Insurance Premiums|
|90.1 – 95% financing
(with lender cashback incentives)
|85.1 – 90% financing||2.00%|
|80.1 – 85% financing||1.75%|
(Purchase up to 95% LTV)
There are also programs available by the insurers that allow for the self-employed borrower unable to prove qualified income, to obtain mortgage financing under an Alt “A” program, who otherwise would not qualify under the traditional guidelines. Ask one of our Broker Financial Group Inc. consultants for more details on the Alt “A” program.
Extended amortizations of up to 35 years are also available to borrowers through the insurers at a slightly higher premium, which allows for greater affordability. Ask us for further details.
On occasion, a lender may require that a conventional deal be insured through the mortgage insurer, in which case the following premiums apply.
|Conventional Insured (LTV)||Insurance Premiums|
65% or less financing
Applicants should be careful to understand why a lender is insisting on insuring a transaction when the LTV is less than 80%, so that they are not being unnecessarily insured.
IMPORTANT NOTE: Do not forget to ask one of our consultants how we can save you money if you are topping up your mortgage on a re-finance.
*On approved credit only, (OAC).
Fees may apply in some circumstances on unqualified transactions.
Statistically speaking, the majority of Canadians renew their mortgage today with their existing Bank at significantly more than the fully discounted rate available to them in the market place. This ultimately ends up costing the consumer thousands of dollars more unnecessarily, and lengthens the average time it would otherwise take to be mortgage free. At Broker Financial Group Inc., we can show you how to save money by not only setting you up with the BEST product by consulting with you, but also by demonstrating to you how we can assist you in paying your mortgage off quicker.
Most mortgage lenders will typically send out a renewal offer to their existing clients approximately 30 days prior to the renewal date with posted rates, which are higher than their best rate. The prudent consumer should begin their search for the best much sooner. At Broker Financial Group Inc., we have the ability to hold rates for 120 days prior to closing for those who wish to apply to secure the best rate well in advance, particularly if rates are on the rise. Don’t make the mistake of leaving the biggest investment of your life until the last moment only to cost yourself thousands. Early renewals at the retail Banking level, (your Branch), are not always what they appear to be and are promoted as a way to ultimately secure a rate before maturity, which again ultimately is not the best rate and costs the consumer more than it should. With Broker Financial Group Inc.’s lender network, not only are you guaranteed the fully discounted rate for 4 months, but on renewal, there is no posted rate. The consumer always gets the full discounted rate all the time.
Consumers should be cautious when receiving a call or notice from their lender suggesting an early renewal. Call a Broker Financial Group Inc. consultant for a more detailed expert analysis on this topic and save.
All renewals/transfers (switches) are completed free of charge and cost you nothing for our services.
Mortgage Refinancing in Toronto & Surrounding
Although many home owners hesitate when considering the possibility of taking on more debt against their home in the form of a mortgage, ultimately it may make sense for them to do so for several different reasons. With the high rate of unsecured debt growing at approximately 30% per annum in Canada, and disposable income growing at approximately 3% per annum, consumers on average are spending money much faster than they are making it. For this reason, many look to the increased equity in their homes in order to increase their cash flow by consolidating their outstanding debt load. This debt consolidation approach actually saves the consumer money, especially with the mortgage rates being at an all time low. The consumer also saves money by consolidating, simply because there is a difference between the mortgage rates and the unsecured rates, by a significant margin.
Why Consider Refinancing?
Other reasons that home owners may re-finance their homes are, home improvements or renovations. With the high cost of homes these days, many are choosing to make changes to their existing homes by renovating their basement, improving and updating their kitchen space, and their bathrooms. There are those who do an equity take-out for investment purposes, or to purchase another home or recreational property. With the higher cost of second mortgages, consumers with equity for the most part will choose to combine their existing first and second mortgages to improve their cash flow situation.
Contact Us for Free Consultation on Mortgage Refinancing
Whatever your reason is to consider mortgage refinancing, with the low cost of mortgage rates today and the flexibility the market has allowed with increased equity in your home, it may make sense to consider the option. Please feel free to contact us for some free advice, whether regarding mortgage refinancing in Toronto, the surrounding GTA, or any other mortgage advice.
Click here for one of our consultant’s free advice.
Repeat Buyers should take the time to ensure that they are getting the best possible deal, regardless of the fact that they have a mortgage with an existing lender. Lenders typically use this as a bargaining chip against the client, and see this as an opportunity to early renew the mortgage with penalties at times, and or a higher rate. This ultimately costs the client thousands of dollars more, than if the client were to payout their existing mortgage, and take advantage of significantly lower/discounted rates. To avoid this, a Repeat Buyer should take the time to understand the calculations so that they could make an educated assessment. In the case that the current rate of the Repeat Buyer on their existing home is comparable to current rates, the above would not necessarily apply and it may be beneficial for the client to remain with their existing lender. Contact us for a free assessment on your situation.
Something else that the Repeat Buyer should also take into consideration before making a decision on their new purchase and mortgage is whether or not the product they currently have with their existing lender is right for them. There are variations of products in the market place today, which can assist you in paying off your mortgage quicker. Please feel free to Contact us for more details.
First-Time Buyers represent the largest group of purchasers in today’s real estate market. Recognizing this, Lenders and Insurers have developed progressive ways to allow for many Canadians to purchase their first home, which would otherwise not have been possible under traditional programs. The most common program utilized today by First-Time Buyers is the 95% high-ratio financing program through both the Canadian Mortgage and Housing Corporation (CMHC), and Genworth Financial (formerly GE Mortgage Insurance).
There are other programs available for First-Time Buyers in order to assist them with the purchase of their first home. Applicants are often enticed by some lenders with 5% down by offering cash back programs for the down payment or for the purchase of appliances etc. Just be aware that these mortgages are offered at significantly higher than discounted rates, and the cash back is pro-rated in the case that you re-finance your mortgage. There are also programs available through Genworth Financial and secondary mortgage lenders through a self-insured program, that allow for 95% financing with higher premiums for the greater risk they take on these types of transactions. These can vary significantly and applicants should consult with a mortgage professional for details on how these programs work. CMHC also permits first-time buyers to borrow their 5% from any other source under certain conditions. For further assistance in understanding these programs and how they work, please feel free to contact us.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 (after January 27, 2009), from yourregistered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.
Learn more amout HBP.
IMPORTANT NOTE: Don’t forget to ask us about how you may qualify for FREE land transfer tax as a First-Time Home Buyer.
The Pre-Approval process is a great way for purchasers to get started with their quest of buying a home. This process ensures that the applicants are able to begin searching for the home that best suits their financial capabilities. With our pre-approvals, we provide up to six month rate hold, and purchasers can be at ease with the buying process in order to make sure they purchase the home that best suits their needs. This process also provides First-Time Buyers a great opportunity to become more educated by asking all their questions well ahead of time so that there are no surprises.
We encourage you to read the information below in advance, in order to be better prepared with questions during your application process.
During our painless Pre-Approval process, we request that our applicants provide us with an application, so that we may quickly furnish them with a firm Pre-Approval, and all that remains at this point is the finality of an Agreement of Purchase.