choose the right fit

There are many different of mortgage available in Canada and it's important to consider all your options. The most common type of mortgage for first-time homebuyers is a "high-ratio insured mortgage". A mortgage is considered "high-ratio" when the minimum down payment of 5% is utilized for a purchase or provide under 20% down payment. When buyers utilize the 5 - 20%down payment, they are charged a mortgage default insurance premium. The insurance premium gets added into the mortgage balance and most times warrants the lowest interest available.

Another type of mortgage is the Insurable mortgage. This product is offered with monolines and some banks. Having an insurable mortgage means you have over 20% down payment and the lender now pays the mortgage default insurance for you, the purchase price does not exceed 1 million dollars. Interest rates on insurable mortgages fluctuate on a sliding scale based on your loan-to-value.

The last main type of mortgage is the Conventional or Uninsured Mortgage. Having a down payment of over 20% and a purchase price of over 1 million, could classify you for a conventional mortgage at some banks. Refinances are also considered uninsurable. Ask your mortgage broker if it makes sense to go insured or uninsured.