What Is a Conventional Mortgage?

August 22, 2010

As a Toronto mortgage broker it’s important for me to remember that there is mortgage jargon and terminology that my audience may not be familiar with. When I work with clients I try and make the experience as educational as possible and I always make an effort to step back and explain mortgage terms no matter how everyday and common they may seem.
I was recently asked what a conventional mortgage is?
A conventional mortgage is a mortgage where the loan amount doesn’t exceed 80% of the current market value of your home.  That means if you are purchasing, your downpayment is 20% or more and if you are refinancing your home you are not financing more than 80%.  A conventional mortgage is a mortgage that doesn’t need to be insured by CMHC or another Canadian mortgage insurer.
If your down payment is less than 20% or you are financing more than 80% of the value of your home then the mortgage is considered to be high ratio and requires mortgage insurance.
Check out my video where I explain it in further detail.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.