High Mortage Ratio
When you require a mortgage for more than 80% of the purchase price of a property,
that mortgage must be insured by Canada Mortgage and Housing Corporation(CMHC) OR
Genworth Mortgage insurance OR Canada Guaranty Mortgage Insurance . The premium
charged by these company`s decreases as the down payment increases. When you finance
your property at 95%, a premium of 2.75% is added to the mortgage. By increasing
the down payment to 10% of the purchase price the premium can be reduced to 2.5%.
If you can put down 20%, you can avoid any additional insurance fee. Depending on
your situation there are ways that you can structure this financing to avoid the
CMHC or GE insurance premium.