TYPICAL MORTGAGE PRODUCT IN CANADA

Roll over mortgage

Equal payment

Loan amortized up to 25 years

Interest rate fixed for term ranging from 6 months to 5 years

Mortgage insurance key pillar of system:

- Maximum loan without MI: 75% LTV

- Maximum loan with MI: 95%

Regulatory requirement for all loans above 75% LTV

Between 15% and 20% of units insured have an LTV<75%

Introduced in 1954 to encourage banks to lend and reduce
initial down payment

Protects lenders against all losses incurred as a result of
borrower default

100% coverage of losses (whole mortgage
outstanding balance + eligible expenses) for life
of mortgage