What is a High Ratio Mortgage?
Buying a home is one of the most significant financial decisions you’ll make in your life. Whether you’re a first-time homebuyer or upgrading to your next property, understanding mortgage types is crucial. One term that often comes up in the Canadian real estate market is “high ratio mortgage.” But what exactly does it mean, and how does it affect your home financing journey? As a trusted Mortgage Agent near you in Saskatoon , I’m here to help demystify high ratio mortgages and guide you toward the right choice for your financial future. Understanding High Ratio Mortgages A high ratio mortgage refers to a home loan where the borrower makes a down payment of less than 20% of the property’s purchase price. Because the loan-to-value ratio (LTV) is higher, lenders consider this type of mortgage riskier compared to a conventional mortgage (which has a down payment of 20% or more). In Canada, when your down payment is less than 20%, mortgage insuran...