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The Bank Act requires that a lender not exceed a loan of 75% of Lending Value unless the loan is insured through CMHC or GE Capital. CMHC/GE insures the mortgage on behalf of the mortgage lender so that if you default on your mortgage the lender’s loan will be paid out. The Borrower pays for the insurance premium, and typically the insurance premium is added to the mortgage. However, borrowers have the option of paying this premium in cash at the time of closing. The insurance premium depends on your loan to value:
| LTV Ratio |
Insurance Premium |
| up to 65% |
0.50% of mortgage |
| 65.1-75% |
0.65% of mortgage |
| 75.1-80% |
1.00% of mortgage |
| 80.1-85% |
1.75% of mortgage |
| 85.1-90% |
2.00% of mortgage |
| 90.1-95% |
3.25% of mortgage |
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