A borrower, Michael, has a mortgage renewal approaching in 3 months. His current mortgage was high-ratio (insured). Due to increased property value, his LTV is now 70%. Which of the following is true regarding mortgage default insurance for his renewal with a new A-lender?

Question: A borrower, Michael, has a mortgage renewal approaching in 3 months. His current mortgage was high-ratio (insured). Due to increased property value, his LTV is now 70%. Which of the following is true regarding mortgage default insurance for his renewal with a new A-lender?

Answer options:

• He will have to pay for a new mortgage default insurance premium.
• The new lender cannot offer a mortgage default insurance product as his LTV is below 80%. ✅ His existing mortgage default insurance can often be ported to the new lender, or he would not need new insurance if the LTV is below 80%.
• He must apply for a new mortgage default insurance policy, but the premium is waived.

Correct answer: His existing mortgage default insurance can often be ported to the new lender, or he would not need new insurance if the LTV is below 80%.

Explanation: For renewed or refinanced mortgages where the original was insured, the insurance often remains in effect or can be ported. If the new LTV is below 80%, new insurance is not required by lenders.