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 George Bargis of Broker Financial Group Inc. 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 high ratio mortgage insurance 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.