What is an insured mortgage?

An insured mortgage is any mortgage with less than 20% down payment. These mortgages have a high loan-to-value (LTV) as the borrowed amount is more than 80% of the home's value. Mortgage insurance is mandatory on these mortgages as you are borrowing more than 80% of the purchase price. The cost of mortgage insurance is added to the mortgage and protects the lender if you default on your mortgage.* 

With mortgage insurance, lenders have lower risks with insured mortgages and so they usually offer lower interest rates on this product. Advertised mortgage rates are usually for insured mortgages only. 

* Personal mortgage insurance is an option for  all borrowers. Depending on what is chosen, this insurance can cover your payments if you become ill or if you lose your job, and it can pay off your mortgage in the event of death. When the unexpected happens, personal mortgage insurance can ease your financial burden.

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