Is Mortgage Insurance Required in Canada?

As you embark on the homeownership journey, it is essential to grasp the nuances of all mortgage-related issues. If you plan on getting a mortgage loan, one question must have come to your mind: is mortgage insurance required in Canada? At Mountainview Insurance, we want to ensure you get the right answers to your pressing questions. That is why we have put together some information outlining whether or not mortgage insurance is required when buying a new home.

Learn the differences between home insurance and mortgage insurance.

Understanding Mortgage Insurance in Canada

Before diving into requirements, it is essential to understand what mortgage insurance is. Mortgage insurance is a type of insurance that protects the lender against default on a loan. In simple terms, if you are unable to make your mortgage payments, this insurance ensures that the lender does not lose money.

What are the benefits of mortgage insurance?

Is Mortgage Insurance Mandatory in Canada?

In Canada, if your down payment is less than 20% of the home’s purchase price, you are generally required to buy mortgage insurance. This stipulation exists because lenders deem mortgages with smaller down payments riskier. The mortgage insurance acts as a safeguard, ensuring that lenders remain protected in case of a default. For those anyone considering a home purchase, it is essential to be aware of this requirement, especially if you are leaning towards a smaller down payment.

How Does This Insurance Impact BC Residents?

BC offers many attractive areas for both first-time buyers and seasoned homeowners. If you are venturing into the real estate realm here, be prepared to factor in the cost of mortgage insurance if your down payment is less than 20%. The exact cost can vary, but it is typically a percentage of the mortgage amount.

Choosing the Right Insurance

If you are exploring your mortgage options, having an insurance agency that knows the local landscape is beneficial. Mountainview Insurance, with its diverse range of insurance options, understands the intricacies of the Canadian and British Columbian markets.

Our tailored approach ensures that every client, whether looking for a home, travel, farm, vehicle, or business insurance, gets the best solutions suited to their individual needs.

Whether you are taking your first steps in homeownership or looking to move into a new space in BC, having a reliable partner like Mountainview Insurance by your side ensures that you are well-equipped to make informed decisions. Contact us through a web form, and we will answer all your insurance-related questions.