What is Mortgage Default Insurance?

Diane Buchanan • September 6, 2016

Mortgage Insurance 101.

As part of the home buying process, you will hear the term mortgage insurance  used a lot, especially if you are applying for a mortgage with a downpayment less than 20% of the purchase price. In Canada there are currently 3 mortgage insurers:

Mortgage default insurance, commonly referred to as mortgage insurance, allows borrowers to achieve home ownership in Canada with as little as 5% down.

Simply put, mortgage insurance is an insurance policy that the bank takes out to protect themselves against your defaulting on the loan. They pass the costs on to you, typically it is added to the mortgage balance and included in your regular payments. Here is some information from each of the mortgage insurers.

From Genworth Canada

Transcript from the video A conventional mortgage in Canada normally requires a down payment of at least 20% of the purchase price. When homebuyers have less than 20% for a down payment, Mortgage Insurance allows them to secure a mortgage for their home purchase. Tailored Mortgage Insurance products from Genworth Canada can help you achieve the dream of homeownership sooner and with as little as 5% down. Saving for a down payment is always a great idea. Trouble is, depending on the area, prices may be rising faster than the savings are building up. And, as values rise, the dream home gets further out of reach. This is where mortgage default insurance – more commonly referred to as “mortgage insurance” – can help…by enabling qualified borrowers to purchase a home with as little as a five per cent down payment. If the right home for you has a purchase price of $300K, then lenders will normally require you to provide a down payment of at least $60K. With Mortgage Insurance, you can secure a mortgage with as little as $15K down. Mortgage insurance is a win-win situation for homebuyers and lenders. Lenders rely on it to protect themselves from financial losses in case a loan is not repaid. Because lenders have this protection, they are able to offer loans with smaller down payments, provided credit and legal requirements are met. For homebuyers, this means access to homeownership sooner at a competitive rate, and with a lower down payment.

From The Canadian Mortgage and Housing Corporation (CMHC)

Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment. Here is a pdf with a chart outlining the cost of the insurance premium:

From Canada Guaranty

Consumer tip:  Mortgage insurance is often confused with other types of insurance associated with homeownership. Knowing the difference will help you understand what coverage is appropriate for your specific needs. Mortgage Insurance is not the same as:

  • Homeowner/Property Insurance: A form of property insurance designed to protect the individual’s home (or possessions in the home) against damages, including loss, theft, fire, or other unforeseen disaster.
  • Mortgage Life Insurance: A type of insurance designed specifically to repay any outstanding mortgage debt in the event of homeowner death or long-term disability.

If you have any questions about mortgage insurance, please let me know, I am more than happy to go through this in depth with you!

DIANE BUCHANAN
 Mortgage Broker

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Is Refinancing Your Mortgage a Good Way to Consolidate Debt?

By Diane Buchanan • February 25, 2026
If you're a homeowner juggling multiple debts, you're not alone. Credit cards, car loans, lines of credit—it can feel like you’re paying out in every direction with no end in sight. But what if there was a smarter way to handle it? Good news: there is. And it starts with your home. Use the Equity You’ve Built to Lighten the Load Every mortgage payment you make, every bit your home appreciates—you're building equity. And that equity can be a powerful financial tool. Instead of letting high-interest debts drain your income, you can leverage your home’s equity to combine and simplify what you owe into one manageable, lower-interest payment. What Does That Look Like? This strategy is called debt consolidation , and there are a few ways to do it: Refinance your existing mortgage Access a Home Equity Line of Credit (HELOC) Take out a second mortgage Each option has its own pros and cons, and the right one depends on your situation. That’s where I come in—we’ll look at the numbers together and choose the best path forward. What Can You Consolidate? You can roll most types of consumer debt into your mortgage, including: Credit cards Personal loans Payday loans Car loans Unsecured lines of credit Student loans These types of debts often come with sky-high interest rates. When you consolidate them into a mortgage—secured by your home—you can typically access much lower rates, freeing up cash flow and reducing financial stress. Why This Works Debt consolidation through your mortgage offers: Lower interest rates (often significantly lower than credit cards or payday loans) One simple monthly payment Potential for faster repayment Improved cash flow And if your mortgage allows prepayment privileges—like lump-sum payments or increased monthly payments—those features can help you pay everything off even faster. Smart Strategy, Not Just a Quick Fix This isn’t just about lowering your monthly bills (although that’s a major perk). It’s about restructuring your finances in a way that’s sustainable, efficient, and empowering. Instead of feeling like you're constantly catching up, you can create a plan to move forward with confidence—and even start saving again. Here’s What the Process Looks Like: Review your current debts and cash flow Assess how much equity you’ve built in your home Explore consolidation options that fit your goals Create a personalized plan to streamline your payments and reduce overall costs Ready to Regain Control? If your debts are holding you back and you're ready to use the equity you've worked hard to build, let's talk. There’s no pressure—just a practical conversation about your options and how to move toward a more flexible, debt-free future. Reach out today. I’m here to help you make the most of what you already have.

Wait! Are You Really Ready to Buy That Home?

By Diane Buchanan • February 18, 2026
So, you’re thinking about buying a home. You’ve got Pinterest boards full of kitchen inspo, you’re casually scrolling listings at midnight, and your friends are talking about interest rates like they’re the weather. But before you dive headfirst into house hunting— wait . Let’s talk about what “ready” really means when it comes to one of the biggest purchases of your life. Because being ready to own a home is about way more than just having a down payment (although that’s part of it). Here are the real signs you're ready—or not quite yet—to take the plunge into homeownership: 1. You're Financially Stable (and Not Just on Payday) Homeownership isn’t a one-time cost. Sure, there’s the down payment, but don’t forget about: Closing costs Property taxes Maintenance & repairs Insurance Monthly mortgage payments If your budget is stretched thin every month or you don’t have an emergency fund, pressing pause might be smart. Owning a home can be more expensive than renting in the short term—and those unexpected costs will show up. 2. You’ve Got a Steady Income and Job Security Lenders like to see consistency. That doesn’t mean you need to be at the same job forever—but a reliable, documented income (ideally for at least 2 years) goes a long way in qualifying for a mortgage. Thinking of switching jobs or going self-employed? That might affect your eligibility, so timing is everything. 3. You Know Your Credit Score—and You’ve Worked On It Your credit score tells lenders how risky (or trustworthy) you are. A higher score opens more doors (literally), while a lower score may mean higher rates—or a declined application. Pro tip: Pull your credit report before applying. Fix errors, pay down balances, and avoid taking on new debt if you’re planning to buy soon. 4. You’re Ready to Stay Put (At Least for a Bit) Buying a home isn’t just a financial decision—it’s a lifestyle one. If you’re still figuring out your long-term plans, buying might not make sense just yet. Generally, staying in your home for at least 3–5 years helps balance the upfront costs and gives your investment time to grow. If you’re more of a “see where life takes me” person right now, that’s totally fine—renting can offer the flexibility you need. 5. You’re Not Just Buying Because Everyone Else Is This one’s big. You’re not behind. You’re not failing. And buying a home just because it seems like the “adult” thing to do is a fast way to end up with buyer’s remorse. Are you buying because it fits your goals? Because you’re ready to settle, invest in your future, and take care of a space that’s all yours? If the answer is yes—you’re in the right headspace. So… Are You Ready? If you’re nodding along to most of these, amazing! You might be more ready than you think. If you’re realizing there are a few things to get in order, that’s okay too. It’s way better to prepare well than to rush into something you're not ready for. Wherever you’re at, I’d love to help you take the next step—whether that’s getting pre-approved, making a plan, or just asking questions without pressure. Let’s make sure your homebuying journey starts strong. Connect anytime—I’m here when you’re ready.