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What is Mortgage Insurance?

What is Mortgage Insurance?

When buying your Orangeville Home you may encounter the topic of Mortgage Insurance. Mortgage Insurance makes home buying more achievable to those with a lower down payment. If you as a buyer have less than 20 per cent to put down then, you require what is referred to as a high-ratio mortgage. A conventional mortgage is what is referred to when you have a minimum of 20 per cent to apply to the down payment. These are the two mortgage options available when you are buying an Orangeville home.

In Canada, mortgage insurance is required federally on high-ratio mortgages. This insurance, which protects the lender in case of borrower default, gives lenders the flexibility to offer borrowers with low down payments the same low interest rates they would offer to home-buyers with more equity.

Mortgage insurance premiums are based on the amount of the mortgage. They are normally added to the mortgage amount of your mortgage and paid over the length of the mortgage..

This insurance is not to be confused with mortgage life insurance which protects homeowners and their families in the event of death or illness.

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