Mortgage with less than 20 percent down, typically requiring default insurance under Canadian rules.
A high-ratio mortgage is a mortgage with a loan-to-value ratio above 80%, which usually means the borrower made a down payment of less than 20% of the purchase price.
High-ratio status changes the financing conversation immediately. It usually means the mortgage needs mortgage default insurance, and it can affect product eligibility, premium treatment, amortization limits, and how the lender prices the file.
In Canadian purchase transactions, a mortgage is usually called high-ratio when the borrower puts less than 20% down and the loan therefore exceeds 80% of the property’s value. That is different from a conventional mortgage, where the borrower contributes at least 20%.
High-ratio does not mean the borrower is reckless or automatically weak. It is a structural label describing the size of the loan relative to the property’s value at origination.
It is also useful to separate high-ratio from insured. In everyday borrower language, the two are often treated as the same thing because high-ratio purchases usually require insurance. In lender and funding language, though, “insured” can be used a little more broadly than just high-ratio.
If you buy a home for $700,000 with a $70,000 down payment, you are borrowing 90% of the purchase price. That is a high-ratio mortgage, so the file normally needs insured financing if it is otherwise eligible.
If the same buyer instead put down $175,000, the financing would drop to 75% of the price and the mortgage would move into the conventional range.
High-ratio is not the same as subprime. A borrower can have strong income and credit and still have a high-ratio mortgage simply because the down payment is below 20%.
It is also easy to confuse high-ratio with insured mortgage. High-ratio mortgages are usually insured, but “insured” can be used more broadly in lender funding discussions.
Borrowers also sometimes think a mortgage becomes high-ratio later if the home’s value falls. On this site, high-ratio refers to the leverage structure of the mortgage when it is originated or assessed for a specific transaction.
Eligibility depends on current insurance rules, purchase price limits, occupancy, and lender policy.