Canada Mortgage Insurance, Mortgage Insurance Canada, Canadian Mortgage Insurance, Mortgage Default Insurance

Canada mortgage insurance, which is also called mortgage default insurance, provides cover for mortgage lenders in case of losses related to the non-repayment of mortgage loans. A lender can suffer losses if a borrower defaults on payments. Most often, a foreclosure of the property that is mortgaged against the loan is insufficient to completely cover the loan. In such cases, the mortgage insurance policy offers financial protection to the lender.

Although mortgage insurance protects the interest of lenders, it is purchased by the borrower. So, the insurance policy that you purchase would protect your lender against non-payment in case you default on your loan.

Canada Mortgage Insurance: Strategies

Most people buying Canada mortgage insurance are asked by insurance agents whether they would like protection against non-repayment due to death. This type of policy is usually offered by financial institutions such as banks. While more than 50% agree to buy bank mortgage insurance, the remaining opt for policies offered by private companies. People prefer private policies for the following reasons:

Discounts are offered on premiums in case the policyholder is healthy and has no family history of common diseases, such as diabetes and heart problem.

High competition in the market results in companies offering the best rates.

The owner of this policy is the person who is paying the premiums. However, in the case of bank mortgage insurance, the policy is owned by the bank that has guaranteed the repayment of the loan.

The person buying the policy has the flexibility to combine all the insurance requirements in one policy. This helps him/her to reduce the policy rate.

The policyholder is free to change the lender from whom s/he has taken the loan. This is not the case for bank mortgage insurance, where the payment is controlled by the bank.

There is no guarantee that a bank will renew the mortgage policy, when the term of the current policy expires.

Under private mortgage insurance Canada, the mortgage amount of term policies does not decline over time. Under bank mortgage insurance, the mortgage amount continues to decline. However, the premium remains unchanged.