Mortgage Types – Ottawa, Ontario
If you have at least 20% of the purchase price (or appraised value if this is lower than the purchase price) as a down payment, you can apply for a conventional mortgage.
Some lenders will require CMHC insurance because of the property’s location or type, even though you have 20% or more equity.
If you have between 5% and 20% of the purchase price as your down payment, you can apply for a high-ratio mortgage. Usually these have to be insured through CMHC (Canada Mortgage and Housing Corporation) or GE (GE Capital). These are mortgage insurance companies.
Purchasing insurance is a common way of qualifying for a mortgage when you have less than 20% equity. The insurance premium is charged only once (per mortgage), when the mortgage funds are advanced. You can pay the premium yourself, but most people choose to add the funds on top of the mortgage.