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What is an insurable mortgage?
Insurable mortgage is not mandatory like insured mortgages are. You can choose not to insure the mortgage and you wouldn’t receive and penalties.
An Insurable Mortgage offers a slightlyhigher rate than insured. The main difference between insured and insurable is that in this instance the lender pays the premium for securitization.
The following are the requirements to apply for insurable mortgages:
- Minimum down payment of 20% or more (loan-to-value of 80% and less)
- Pass mortgage stress test
- Purchase price in the region of less than $1 million
- A credit score of over 600 and a reasonable debt service ratio limit
- 25 years as maximum amortization
What is an Uninsured Mortgage?
Uninsured Mortgages just means you cannot insure it whether you want to or not. An Uninsured mortgage implies that no additional premium is paid by either the borrower or lender. Uninsured rates are typically higher then insured rates.
The following are examples why you can’t have an insured mortgage:
- Purchasing non-owner-occupied single-unit rental properties
- Purchases worth $1million or more
- Amortizations in excess of 25 years
- Refinances (usually when you opt for a loan with higher risk)
