Banks and other mortgage lenders will typically lend you up to 80% of the appraised value of a home, leaving you to provide the balance of 20%.

This is known as “80% loan-to-value.”

In Canada, though, buyers can buy with 5-19% down by having mortgage insurance (also called “mortgage default insurance”  through a company like CMHC, Canada Guaranty, or Genworth.

These insurers protect the bank from the higher risk associated with clients who have a smaller down payment.

Buyers pay the cost of the insurance in their monthly mortgage payments, a premium of somewhere between 2.8-4.0%.  Many Canadians feel that the extra expense is well worth it, since they might not otherwise be able to afford to buy a home.

Use this calculator to figure out how mortgage insurance would affect your monthly payments with the down payment you have available.  Then you can decide whether this option is right for you!

**(The total of mortgage insurance you must purchase is taxable, and that tax must be paid in full on closing, as it cannot be rolled into monthly payments.  Be sure to discuss these costs with your real estate lawyer so that you are not surprised at your final bill.) You can read more about mortgage insurance here.