Mortgage Loan Insurance
If you have less than 20% saved for a down payment, you’ll have to get mortgage loan insurance. It protects the lender against the risk of mortgage default. In Canada, there are three providers of mortgage loan insurance: CMHC, Genworth, and Canada Guaranty.
Insurance premiums on mortgage loans are calculated as a percentage of your total loan amount. They’re based on factors including the size and source of your down payment, and also the type of loan you are getting.
In general, the smaller the down payment is, the higher the insurance premiums will be. Normally the cost of the mortgage loan insurance is added to your mortgage amount, so you don’t have to cover this cost up front.