Maria is a first-time homebuyer in Toronto looking to purchase a $600,000 condo with a 5% down payment. Given her limited deposit and the property value, which type of mortgage insurer must be involved in her mortgage application?

Question: Maria is a first-time homebuyer in Toronto looking to purchase a $600,000 condo with a 5% down payment. Given her limited deposit and the property value, which type of mortgage insurer must be involved in her mortgage application?

Answer options: ✅ Either CMHC, Sagen (formerly Genworth Canada), or Canada Guaranty, as all three provide high-ratio mortgage default insurance for loans exceeding 80% LTV.

• Only CMHC, as they are the sole government-backed insurer for properties above $500,000.
• A private mortgage insurer, as traditional insurers might not cover mortgages over $500,000 with a minimal down payment.
• No mortgage insurer is required, as the down payment is exactly 5%.

Correct answer: Either CMHC, Sagen (formerly Genworth Canada), or Canada Guaranty, as all three provide high-ratio mortgage default insurance for loans exceeding 80% LTV.

Explanation: For conventional mortgages with a loan-to-value (LTV) ratio exceeding 80% (i.e., less than a 20% down payment), mortgage default insurance is mandatory in Canada. CMHC, Sagen, and Canada Guaranty are the three main providers of this insurance, regardless of property value (up to $1 million for insured mortgages), as per OSFI Guideline B-20 and respective insurer guidelines.