Expert Answers: Conventional vs. High Ratio Mortgage

Are you on the hunt for a new home and/or mortgage? High-ratio or Conventional mortgage questions? Curious about the difference between these two mortgage options?

Our good friend Charles Kornbluth from RBC gives you the info you need in this ‘Expert Answers’ video segment.

The main difference between a conventional and high-ratio mortgage revolves around the amount of deposit you have available to apply towards the purchase price of a home. Charles highlights that if you do not have a minimum of 20% cash to apply towards the purchase price, your mortgage will be considered “high-ratio”. A high-ratio mortgage would then be subject to mortgage insurance (covered under a previous video – click here). This mortgage premium is then added to your mortgage amount and paid over the term of the mortgage in small amounts added to your monthly mortgage payment.

If your downpayment amounts to 20% of the purchase price (or above), you won’t have to obtain mortgage insurance and will save the money associated with this insurance.

Keep in mind that mortgage rates for Buyers who are applying for high-ratio mortgages are no different than the rates applicable for people applying for conventional mortgages. Charles and his team with RBC are able to secure some of the most competitive rates in the market place.


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