Conventional mortgage is the most common mortgage type. It requires the home buyer to put down at least 20% of the purchase price as down payment.
As an alternative, a high ratio mortgage is useful for those who have less than a 20% down payment. High ratio mortgage allows you to buy a home with less than 20% of the purchase price as down payment. This method requires mortgage insurance to protect against default. Mortgage insurance is usually purchased by the lender through one of Canada’s default insurers, upon closing. The cost of the premium is added on to the mortgage and amortized over the length of the mortgage. It can also be added to the closing costs; however this is not the norm.