When you’re getting ready to buy a home, you’ll hear the terms conventional mortgage and high-ratio mortgage pretty quickly. Here’s what they actually mean in plain language.
Conventional Mortgage
This is when you're putting at least 20% down on the home you’re buying.
With that amount of down payment, the lender doesn’t need mortgage default insurance. The approval process tends to be a little more straightforward because you already have more equity in the property.
High-Ratio Mortgage
If your down payment is less than 20%, you’re getting a high-ratio mortgage.
That just means the lender has to send your application to a mortgage default insurer for approval. It’s a normal part of the process, especially for first-time buyers.
Who Are the Insurers?
There are three mortgage insurers in Canada:
CMHC (the one most people know)
Sagen
Canada Guaranty
Your mortgage broker or lender decides which insurer to use depending on the file. Buyers don’t have to choose; it happens behind the scenes.
Why This Matters
Understanding the difference helps you set expectations early on — especially around budgeting and pre-approval. In Kingston and area, lots of first-time buyers go the high-ratio route, and it’s completely normal.
If you’d like a referral to a local mortgage broker who can walk you through your options, just let us know. We’re always happy to connect you with someone great.
Watch the video here: