High Ratio Mortgage

Buying With as Little as 5%

Down You can buy a home for as little as 5% down payment under two major programs administered by CMHC, a Federal Crown Corporation, GE Capital Mortgage Insurance Co., a private sector insurer, and AIG United Guaranty, another private sector insurer that has just recently entered the Canadian market.

The regular CMHC/GE Capital Programs allow you to obtain a mortgage of up to 95% of the purchase price. It can be used by any qualified borrower who is not a first-time homebuyer, who has at least 5% as a down payment, or who wishes to purchase a home whose value is above the "ceiling" established in that area for the First Home Loan Insurance Program.

Generally, CMHC requires one year of job stability for the 5% down payment program. However, the one year minimum requirement may be waived at the discretion of the lender. Other important factors to consider are the job type and the down payment amount. With a higher down payment, the chances of obtaining a high ratio mortgage increase significantly.

Depending upon the percentage of down payment to be used, CMHC and GE charge the following one-time insurance premium to you, the borrower. This premium can be added to the mortgage without affecting the Loan To Value ratio (LTV).

% Financing ------------- Insurance Premium on Total Loan
(Loan Amount as a % of the Value/Purchase Price of the Home)

90.1%-95% ------------- 2.75 / 2.90%
85.1%-90% ------------- 2.00%
80.1%-85% ------------- 1.75%
75.1%-80% ------------- 1.00%
65.0%-75% ------------- 0.65%
Up to 65% --------------- 0.50%