WHAT IS MORTGAGE INSURANCE? DEFINITION [mortgage insurance protects the lender from losses related to borrower default and foreclosure] DID YOU KNOW mortgage insurance first started in the United States way back in the 1880s, but was completely bankrupted after the Depression, and didn’t exist again until 1956. The Canadian government began to think about housing near the end of WWII, when thousands of soldiers were re-entering society, and CMHC was created in 1946 in response to these housing demands and a policy that every family in Canada have their own home. In 1954, our federal government amended the National Housing Act which left mortgage financing up to the banks who then issued mortgage loans with CMHC underwriting. If the borrower went bankrupt, the lender wouldn’t lose money, but would instead be reimbursed by the government. Mortgage insurance premiums depend on two factors: the type of mortgage, and amount of down payment. Premiums vary depending on the down payment and essentially, the larger your down payment, the lower your premium. The less you put down, the higher risk to the lender; therefore the lender wants insurance against a possible default. Mortgage insurance is not the same as homeowner/property insurance which is designed to protect your home and possessions against losses eg fire, theft, etc., and mortgage life insurance is designed to repay mortgage debt in the event of death or long-term disability. We will provide you with information specifically related to your situation as well as a quote re premiums and benefits.