High-Ratio Mortgages in Canada
A high-ratio mortgage has a loan-to-value (LTV) ratio greater than 80% — meaning your down payment is less than 20%.
High-Ratio vs Conventional
| Feature |
High-Ratio |
Conventional |
| Down payment |
Less than 20% |
20% or more |
| LTV ratio |
Over 80% |
80% or less |
| Mortgage insurance |
Required |
Not required |
| Max amortization |
25 years |
30 years |
| Max home price |
$1.5 million |
No limit |
Minimum Down Payment Requirements
| Home Price |
Minimum Down Payment |
Amount on $600K Home |
| Up to $500,000 |
5% |
$25,000 |
| $500,001 - $999,999 |
5% + 10% above $500K |
$35,000* |
| $1,000,000 - $1,499,999 |
5% + 10% above $500K |
N/A |
| $1,500,000+ |
20% (not insurable) |
N/A |
*$25,000 on first $500K + $10,000 on remaining $100K = $35,000
CMHC Insurance Premiums
| Down Payment |
Premium Rate |
On $500K Mortgage |
| 5% - 9.99% |
4.00% |
$20,000 |
| 10% - 14.99% |
3.10% |
$15,500 |
| 15% - 19.99% |
2.80% |
$14,000 |
| 20%+ |
0% (not required) |
$0 |
Example: $600,000 Home with 5% Down
| Component |
Amount |
| Home price |
$600,000 |
| Down payment (5% on $500K + 10% on $100K) |
$35,000 |
| Mortgage amount |
$565,000 |
| CMHC premium (4.0%) |
$22,600 |
| Total mortgage |
$587,600 |
Insurance Premium Added to Payments
The CMHC premium is added to your mortgage:
| Scenario |
Without Insurance |
With Insurance |
| Mortgage |
$475,000 |
$494,000 |
| Monthly (5%, 25yr) |
$2,770 |
$2,881 |
| Extra/month |
— |
$111 |
| Total extra paid |
— |
~$33,300 |
Mortgage Insurance Providers
| Provider |
Market Share |
| CMHC (Canada Mortgage and Housing) |
~50% |
| Sagen (formerly Genworth) |
~30% |
| Canada Guaranty |
~20% |
All three charge similar premiums. Your lender chooses the provider.
High-Ratio Mortgage Rules
Requirements
| Rule |
Details |
| Minimum credit score |
600+ (often 680+ for best rates) |
| Maximum amortization |
25 years |
| Maximum home price |
$1,499,999 |
| Property type |
Must be owner-occupied |
| Debt service ratios |
GDS ≤ 39%, TDS ≤ 44% |
| Stress test |
Must qualify at higher rate |
Restrictions
| Not Allowed |
Details |
| 30-year amortization |
Max 25 years with insurance |
| Investment properties |
Must live in the home |
| Homes over $1.5M |
Not eligible for insurance |
| Refinancing |
Can’t insure a refinance |
Benefits of High-Ratio Mortgages
| Benefit |
Explanation |
| Get into market sooner |
Don’t need to save 20% |
| Often lower rates |
Insurance reduces lender risk |
| Build equity faster |
Start paying down sooner |
| Market appreciation |
Benefit from rising prices |
Drawbacks of High-Ratio Mortgages
| Drawback |
Impact |
| Insurance premium |
Adds thousands to mortgage |
| 25-year max amortization |
Higher monthly payments |
| Stress test required |
May qualify for less |
| Higher total interest |
Longer payoff, more interest |
High-Ratio vs 20% Down: Comparison
$600,000 home, 5.5% rate:
| Metric |
5% Down |
20% Down |
| Down payment |
$35,000 |
$120,000 |
| Mortgage |
$587,600 |
$480,000 |
| Amortization |
25 years |
30 years |
| Monthly payment |
$3,593 |
$2,718 |
| Total paid |
$1,077,900 |
$978,480 |
| Total interest |
$490,300 |
$498,480 |
With 5% down, you pay more monthly but start building equity 85K sooner.
Should You Get a High-Ratio Mortgage?
Consider High-Ratio If:
- Housing prices are rising
- Rent is comparable to ownership costs
- Your income will increase
- You want to stop renting sooner
Consider Waiting for 20% If:
- You can save quickly
- Housing prices are flat/falling
- You want lower monthly payments
- You prefer 30-year amortization
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