What Is a High Ratio Mortgage and How to Qualify in Ontario
A high ratio mortgage lets you buy a home in Ontario with less than 20% down. It’s one of the most common ways first-time buyers get into the market, especially in areas like Simcoe County where home prices are rising. If you want to own a home but don’t have a big down payment, this could be your solution.
Key Takeaways
- A high ratio mortgage means putting less than 20% down on your home
- It allows first-time buyers to enter the market sooner with as little as 5% down
- Mortgage insurance is required and added to your loan
- TMC Greater Simcoe helps you qualify and explore your options locally
What Is a High Ratio Mortgage in Canada?
A high ratio mortgage means your down payment is less than 20% of the home’s purchase price. Because your lender is taking on more risk, they require mortgage default insurance to protect themselves in case you can’t make your payments. This insurance makes it possible for more people to access home ownership, even without a large savings account.
How a High Ratio Mortgage Helps First-Time Buyers
This mortgage option is especially helpful for first-time buyers in Ontario who are paying rent, saving monthly, but don’t have a full 20% saved yet. It helps you:
- Buy a home with as little as 5% down
- Get into the market before prices rise further
- Start building equity and stop paying rent
The earlier you get into the market, the more time your home has to grow in value. That’s why many first-time buyers use high ratio mortgages as their stepping stone.
Down Payment Rules for High Ratio Mortgages
Here’s a quick breakdown of how much you’ll need based on your home’s purchase price in Ontario:
Home Price | Minimum Down Payment |
Up to $500,000 | 5% |
$500,000 to $999,999 | 5% on first $500K + 10% on remainder |
$1,000,000+ | 20% (high ratio not available) |
You can purchase with less than 20% down for homes up to $1.5 million. For anything above that, you’ll need a conventional mortgage and at least 20% down. Most first-time buyers in Simcoe County are shopping below this threshold.
High Ratio Mortgage Insurance in Ontario
When your down payment is under 20%, mortgage insurance is required. This cost is added to your mortgage, so you don’t have to pay it out of pocket.
There are three approved insurers in Canada:
- CMHC (Canada Mortgage and Housing Corporation)
- Sagen (formerly Genworth Financial)
- Canada Guaranty
The premium amount depends on your down payment percentage and mortgage size. It’s not the same for everyone, which is why working with a mortgage broker helps you see the full picture before making an offer.
How to Qualify for a High Ratio Mortgage
To get approved for a high ratio mortgage, lenders will review your financial health. That includes:
- Steady income and proof of employment
- A solid credit score (minimum 600, but 680+ is ideal)
- Your total debt compared to your income (called debt ratios)
- The property type and location
At TMC Greater Simcoe – The Mortgage Coach, we walk you through each step. We help you figure out what you can afford, connect you to the right lenders, and explain everything in plain language.
High Ratio Mortgage Options in Simcoe County
Whether you’re buying in Orillia, Barrie, Innisfil, or any surrounding area, there are flexible options available. Our team knows the local market and has relationships with lenders who understand the challenges Ontario buyers are facing.
Not all lenders offer the same terms. That’s why working with a mortgage broker can make all the difference in getting the best possible deal.
👉 Book a call with our team and find out your options today.
Pros and Cons of a High Ratio Mortgage
Pros | Cons |
Buy with as little as 5% down | Must pay mortgage insurance |
Enter the market sooner | Slightly higher monthly payments |
Build equity instead of renting | Can’t be used on homes over $1M |
Is a High Ratio Mortgage Right for Your First Home?
If you’re ready to buy a home but don’t have a full 20% saved, this could be a smart option. You don’t have to wait years just to hit a savings goal while home prices keep rising. A high ratio mortgage lets you act now, build equity faster, and stop paying rent.
We’ll walk you through your numbers, explore your approval options, and make sure you feel confident about the process.
📞 Let’s connect: Book a free discovery call or call (705) 238-1097
FAQs: High Ratio Mortgages in Ontario
What is a high ratio mortgage in Canada?
A high ratio mortgage is when you buy a home with less than 20% down. You’ll need mortgage insurance to qualify.
How much do I need for a down payment in Ontario?
You need at least 5% down for homes under $500,000 in Ontario. For homes over that amount, the down payment requirement increases.
Do I need mortgage insurance with a high ratio mortgage?
Yes, mortgage insurance is required if your down payment is below 20%. The premium is added to your mortgage total.
Is a high ratio mortgage good for first-time buyers in Simcoe County?
Yes. It allows buyers with limited savings to become homeowners sooner, especially in a competitive market like Simcoe.
Who provides mortgage insurance in Canada?
CMHC, Sagen, and Canada Guaranty are the three approved mortgage insurance providers in Canada.
Can I get a high ratio mortgage in Simcoe County?
Yes! Many local lenders offer this type of mortgage. Our team at TMC Greater Simcoe can help you find one that fits your needs.
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