What is Mortgage Default Insurance?
Mortgage default insurance, commonly referred to as “mortgage insurance”, protects the lender from losses related to borrower default on their mortgage loan. Mortgage insurance is required by the Government of Canada on all high-ratio mortgages where the home buyer is putting less than 20 per cent down payment on the purchase price of a home. This insurance, which allows lenders greater flexibility to offer programs that require a lower down payment, means that qualified borrowers can purchase a home with as little as five per cent down.