High-Ratio Mortgage
A mortgage with less than 20% down payment — loan-to-value ratio above 80% — that must carry default insurance.
A high-ratio mortgage is defined by a loan-to-value (LTV) ratio above 80% — i.e., less than 20% down payment. High-ratio mortgages must carry default insurance from CMHC, Sagen, or Canada Guaranty, with premiums tiered by LTV: 2.80% at 80.01–85% LTV, 3.10% at 85.01–90% LTV, and 4.00% at 90.01–95% LTV. Down payment minimums are tiered: 5% on the first $500,000 and 10% on the portion above (up to the $1.5M insurable cap, above which insured financing is unavailable). High-ratio borrowers benefit from lower rates (insured pricing typically runs modestly better than uninsured) because the insurance premium transfers default risk to the insurer.
Related Terms
A mortgage where CMHC, Sagen, or Canada Guaranty carries the default risk — required when the down payment is less than 20% of the purchase price.
The ratio of your mortgage balance to the property's appraised value — the key metric for insurance, pricing, and HELOC limits.