In the event you require a high-ratio mortgage (more than 75% of the lending value of the property), the mortgage lender will require mortgage loan insurance that pays the lender the full amount of the principal, interest and costs should you default on the loan. Mortgage loan insurance is available from CMHC, a federal agency, or from private insurers.

A form of insurance protection for a borrower that would pay part or all of the mortgage debt upon the death of the insured person.

High ratio mortgages must be insured through CMHC (Canada Mortgage and Housing Corporation) or GENCOR (G.E. Capital Corporation). These Insurers guarantee the risk of lending to home buyers who need a high ratio mortgage. An insurance premium is paid by the borrower on behalf of the lender. The insurance premium that is paid to CMHC is to protect the lender in the event that the mortgage is not paid. This is not life, disability, or job loss insurance. The insurance premium is calculated as a percentage of the mortgage amount, depending on the loan to value, and may be added to the mortgage amount. The premiums are as follows: Loan to Value Premium 75.1 - 80% 1.00% 80.1 - 85% 1.75% 85.1 - 90% 2.00% 90.1 - 95% 2.75% Other high ratio financing costs include an appraisal of $165.00 plus 8% PST on the insurance premium.