Conventional Mortgage

A conventional mortgage is one where the loan-to-value ratio is 80% or less — meaning the down payment (or existing equity, on a refinance) is at least 20% of the property value. Because the lender is exposed to less risk, no CMHC, Sagen, or Canada Guaranty insurance is required. Conventional mortgages can be amortised up to 30 years (versus 25 for most insured mortgages), but rates are sometimes slightly higher than insured mortgages because insured loans are backed by the government and resold easily. On larger purchases above the CMHC cap, conventional financing is the only option.