Conventional Mortgage

Quick Summary

A mortgage that does not require mortgage default insurance (typically 20%+ down).

ELI5 Explanation

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You put down enough money that the bank doesn’t need default insurance.

Detailed Explanation

In Canada, a conventional mortgage generally means the down payment is at least 20%, so default insurance isn’t required. Without insurance premiums, borrowing costs can be lower, but qualification still depends on income, credit, and debt ratios.

Example

A buyer puts 25% down and gets a conventional mortgage without CMHC premiums.

Why It Matters

It helps you compare true costs versus an insured (high-ratio) mortgage.