Northern Birch Credit Union understands that achieving your dream of home ownership can feel challenging. Saving for a down payment is daunting, especially as house prices and interest rates rise.
That’s why we provide personalized mortgage solutions tailored to your unique situation. With the rising cost of purchasing a home, a high-ratio insured mortgage is an excellent path to home ownership.
What is a high-ratio insured mortgage?
Unlike traditional mortgages, a high-ratio insured mortgage accepts down payments of less than 20% of the property’s purchase price and as low as 5% of the purchase price. Because the loan represents a higher percentage of the home’s value (hence “high-ratio”), it is considered riskier for lenders. To mitigate this risk, the mortgage is insured by a third party, such as the Canada Mortgage and Housing Corporation (CMHC) or another approved insurer.
Benefits of a High-Ratio Insured Mortgage for First-Time Home Buyers
A high-ratio insured mortgage is designed to make home ownership more accessible, particularly for first-time buyers. With a lower down payment requirement and competitive rates, this option helps you enter the market sooner and start building equity faster.
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Lower Down Payment Requirements
The most significant advantage of a high-ratio insured mortgage is that it allows you to purchase a home without putting 20% down. This makes home ownership more accessible, especially for first-time buyers or those who may not have substantial savings. You can use our mortgage affordability calculator to estimate monthly payments with a high-ratio insured mortgage.
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Competitive Interest Rates
Northern Birch offers members competitive interest rates, which can save you thousands of dollars over the life of your loan. Check out current rates on our website. As lending rates are constantly flexing, we recommend getting a pre-approval to lock in your preferred rate for 130 days.
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Faster Path to Home Ownership
With a lower down payment, you don’t have to wait years to save up for a home. You can start building equity in your home sooner and take advantage of potential property value appreciation.
Insurance, Rates and Eligibility for High-Ratio Insured Mortgages
Understanding mortgage insurance, eligibility, and payment terms is key to making informed decisions about your home purchase. Here’s what you need to know:
| What to factor in | Description |
|---|---|
| Mortgage Insurance Premium (MIP) | Since the mortgage is insured, borrowers are required to pay a mortgage insurance premium. This premium is typically added to your mortgage amount and paid over time. The cost depends on the size of your down payment and the loan amount. |
| Maximum Purchase Price Limits | As of December 15, 2024, the Canadian Government increased the maximum purchase price for insured mortgages from $1 million to $1.5 million. When the purchase price is above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion up to $1.5 million. Homes priced above $1.5 million are not eligible for mortgage insurance and therefore require down payment of at least 20%. |
| Amortization Periods | First-time home buyers purchasing a new build can amortize their mortgage for up to 30 years. A longer amortization period lowers the amount of your monthly payment, making home ownership more affordable. Buyers may however choose shorter terms depending on their financial situation. |
Who Should Consider a High-Ratio Mortgage?
A high-ratio insured mortgage is an excellent option for:
- First-Time Home Buyers and Young FamiliesIf you’re new to the housing market and don’t have a 20% down payment saved, this helps you get started.
Before beginning your search for your new home, sit down with a mortgage specialist at Northern Birch. We will walk you through the process of qualifying for a mortgage. Start your search with a mortgage pre-approval. The pre-approval guarantees a competitive rate for 130 days.
Why Choose Northern Birch for Your High-Ratio Insured Mortgage?
At Northern Birch we take a holistic approach to mortgage approvals.
- We care for our members, explaining each step of the process leading to home ownership.
- We consider your entire financial picture, including income stability, debt levels, and future potential.
- We care about your overall financial well-being.
- We are community focused, investing in the things our members are interested in.
Ready to Start the Path to Home Ownership?
If you’ve been dreaming of home ownership but thought it was out of reach, a high-ratio insured mortgage could be the solution you’ve been looking for.
Make an appointment with a member of our lending team today.
Schedule a consultation todayNorthern Birch Credit Union supports you on your journey towards financial well-being. The information in this article is provided as an educational overview. Each member’s financial journey is unique. We encourage you to talk to us – we can help you reach your financial goals.
*Offer subject to change at any time. Terms and conditions may apply. Visit our website for details.
