In Canada, the minimum down payment (the amount you need to pay upfront to buy a property that usually represent 5-20% of the property value) is 5%. However, federally regulated lenders (as well as most provincially regulated financial institutions) are required by the Canada Bank Act to purchase insurance for mortgages with a down payment that is less than 20% of the purchase price. Lenders will usually pass the cost of this insurance on to you, the borrower.\n\n\nThis program was put in place by the Government of Canada to protect lenders, and to offer homebuyers who don’t have a large down payment the opportunity to purchase a home.\n\n\nWho is issuing Mortgage Loan Insurance?\n\n\nIn Canada, mortgage loan insurance is mainly offered through two companies, Canada Mortgage and Housing Corporation (CMHC), which is the most popular choice, and Genworth Financial.\n\n\nCanada’s largest mortgage loan insurer, the CMHC, is a federal government agency which operates on a commercial basis. Its mandate is to help Canadians access a variety of affordable housing options by providing lenders with a 100% repayment guarantee should the borrower default.\n\n\nIn order to help Canadians become homeowners, Genworth Canada, the country’s largest private residential mortgage insurer, offers a Homeowner Assistance Program. Mortgage loans insured through Genworth Financial are guaranteed up to 90%.\n\n\nFaster, yet Responsible\n\n\nNot only will mortgage loan insurance allow you to achieve your dream of owning a home faster, it will also give you access to more affordable mortgage rates. On the flip side, you’ll have to add the insurance premium to your mortgage repayment. Thanks to this program, you can own the home you’ve been dreaming of, while keeping your monthly payments at a level you can afford. (See: Mortgage Default Insurance)\n\n\nContact your commission-free nesto Mortgage Advisor today to find out how you can enter the world of homeownership.