Your First Mortgage


Typically, your first mortgage will be one of two types, a High Ratio or Conventional Mortgage.

High-Ratio Mortgages (Insured Mortgages)

A high-ratio mortgage is one of the most common types of residential mortgages. If you are not able to save a down payment of at least 20% to purchase your home, you have the option (upon approval) of partnering with CMHC (Canada Mortgage and Housing Corporation), Genworth, or Canada Guaranty, who will assess the risk of your financial application, charge you an insurance premium commensurate with that risk, and pass on assurance to the lender that your mortgage, or the portion of your mortgage that cannot be repaid, will be paid [by them] in the event of your personal default. High-ratio mortgages are available for up to 95% of the purchase price (or of the appraised value, whichever is less). Having a high ratio mortgage means you have a larger mortgage balance to repay and less equity in your home at the start.

Conventional Mortgages

The conventional mortgage is another common type of residential mortgage. A conventional mortgage does not exceed 80% of the value of the property, which means that there must be 20% cash put into the property at the time of purchase. In a conventional mortgage, the loan you are allowed to take out on a property cannot exceed 80% of the purchase or appraised value of the property, whichever value is less.

Click here to see other types of mortgages.