Conventional Mortgage
A mortgage with 20% or more down payment — uninsured and with a loan-to-value ratio of 80% or below.
A conventional mortgage is the term for a mortgage with 20% or more down payment, where default insurance is not required. Also called an 'uninsured' mortgage. The lender carries the full default risk, which is why conventional rates run 30–60 basis points higher than equivalent insured rates. Conventional borrowers typically get 30-year amortization by default and avoid the CMHC/Sagen/Canada Guaranty insurance premium (2.8–4.0% of the loan).
Related Terms
A mortgage with 20% or more down payment where the lender carries default risk and no insurance premium is paid.
A mortgage with less than 20% down payment — loan-to-value ratio above 80% — that must carry default insurance.
The ratio of your mortgage balance to the property's appraised value — the key metric for insurance, pricing, and HELOC limits.