Home TrustMortgagesMortgage insurance Mortgage insurance Help protect your home and mortgage with insurance When you make the exciting decision to purchase a home, you’ll probably have a lot of questions, including understanding the different types of insurance required or available to you such as default insurance, which can help you buy a home sooner; title insurance, which protects against ownership disputes; and life and disability insurance, which protects your investment if the unexpected happens. Mortgage default insurance Mortgage default insurance, commonly referred to as “mortgage insurance” is a policy that protect the lender if the borrower is unable to make payments on the loan. It helps Canadians buy a home sooner and with a lower down payment. In fact, qualified borrowers can purchase a home with as little as 5% down. In Canada, mortgage insurance is required federally on high-ratio mortgages – that is, mortgages with a down payment of less than 20%. This insurance, which protects the lender and investor – not the homeowner in case of borrower default – gives lenders the flexibility to offer borrowers with low down payments the same low interest rates they would offer to homebuyers with more equity. Mortgage insurance can also assist the borrower in the event they need to skip a mortgage payment due to job loss. This protects the borrower from defaulting on their mortgage due to a single missed payment. For those with a high ratio mortgage, borrowers may access other programs available through mortgage insurers to keep them in their homes. The cost of mortgage insurance depends on two factors: The type of mortgage applied for. The amount of the down payment. The cost to purchase mortgage insurance is known as the ‘premium’. Mortgage insurance premiums are based on the amount of the mortgage and although they can be paid in a lump sum upon closing by the client, they are normally added to the mortgage amount and included in the monthly mortgage payment. Any mortgage at Home Trust with an LTV (Loan-To-Value) of 80% or greater must be insured. This allows Home Trust to lend over 80% LTV with less risk as with mortgage insurance Home Trust will receive mortgage payments even if the client were to default on their mortgage payments. There are 3 major mortgage insurers: Canadian Mortgage and Housing Corporation (CMHC) Sagen MI Canada Inc. Canada Guaranty Company (CGC) Title insurance Title insurance protects property buyers (personal title insurance) and mortgage lenders (lender title insurance) against defects or problems with a title when there is a property ownership transfer. If a title dispute arises during a sale, the title insurance company may be responsible for paying specified legal damages, depending on the policy. Learn more about title insurance. Mortgage life and disability insurance When you buy a house, it’s natural to want to protect your investment in case the unexpected happens. The unexpected can be a serious accident, disability or even death. Mortgage life and disability insurance provides a safety net for you and your family. It enables you to pay off the outstanding balance on your mortgage in the event of your death or make your monthly payments in the event of a disability. Learn about the Credit Security Plan™ from Manulife. Ask us a question Get in touch 2300-145 King Street West, Toronto, Ontario M5H 1J8 Phone: 1-877-903-2133 or 416-775-5000 Fax: 1-888-470-2092 or 416-363-7611 inquiry.htc@hometrust.ca Contact Complaint Procedure Our solutions Mortgages Credit Cards Deposits Who we are Our Story Careers Home Trust Blog Learn more Privacy Public Accountability Legal Terms FATCA Accessibility plan Regulatory Disclosures Home Capital Group Home Bank Oaken Financial TSX:HCG #HomeHappensHere Icon facebook-square © Copyright 2021 Home Trust Company. All rights reserved.