LOL it's funny that people are rewarded for having a high ratio mortgage.
It really doesn't make any sense to the borrower. After all, why would they reward the client for having a lower down payment? The reason is because there are some lenders that insure ALL their mortgages through CMHC, regardless of whether you have 5% down payment or 30%. Some lenders will pay the CMHC fees on your behalf with a down payment of 20% or more, making them less competitive on rate. You still get a great rate, just not as good as they would be able to give on a hi-ratio mortgage.
Hope that helps clarify, as it is a very common area of confusion as you can imagine.
CityCan Financial (est 1976)
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