What is a mortgage insurance
Mortgage Loan insurance is typically required by lenders when a home buyer makes a down payment of less than 20% on the purchase price of a home. Mortgage loan insurance protects the lender against mortgage default and allows home buyers to buy homes with a minimum down payment of 5%, and getting interest rates same as putting a typical 20% down payment. To obtain mortgage loan insurance, lenders pay the insurance premium. Usually, the lender will pass this cost on to the consumer. The premium is based on a percentage of the home's purchase price, as financed by the mortgage. The premium can be paid in a single lump sum or could be added to the consumer's mortgage and included in the monthly payments.
Three major mortgage insurers in Canada are as follows