Genworth Series:What is Mortgage Default Insurance

Privlages for Home Owners

The amount of money you save for the down payment will determine whether you will require mortgage default insurance. If you have a down payment which equals 20% or more of the price of your home, you will qualify for a conventional mortgage and mortgage insurance will not be necessary. If you have a down payment that is less than 20% of the price of your home, you will need to take a high-ratio mortgage as well as mortgage default insurance. 

Mortgage default insurance provides the lender with the flexibility to offer you the same competitive interest rates available to homebuyers with a larger down payment. It’s insurance, which guarantees the mortgage by protecting the lender should the homeowner be unable to continue their payments for some unforeseen reason.

Mortgage insurance premiums are paid once, but can also be added to the principal of the mortgage.

What Companies Provide Mortgage Default Insurance in Canada? `

There are currently three mortgage default insurance providers in Canada: Genworth Financial Canada; Canada Mortgage and Housing Corporation, a government agency; and, Canada Guaranty. Genworth Financial Canada, known as The Homeownership Company, is the largest private insurer in Canada. Since 1995, they have assisted more than one million Canadians in realizing their dream of homeownership. Genworth works with lenders, brokers and builders to make homeownership more accessible for Canadians.

What Is the Benefit of Mortgage Default Insurance?

Mortgage default insurance is a win-win situation for both homebuyers and lenders. Lenders rely on mortgage default insurance to protect themselves from financial losses in case a loan is not repaid. Because lenders have this protection, they are able to offer loans with smaller down payments, provided credit requirements are met. This means you can get access to homeownership earlier at a competitive rate, and with a lower down payment. 

It also means you will begin to build equity in your home sooner. Many Canadian homeowners, particularly first-time homebuyers, carry mortgage default insurance on their home. Aside from building equity sooner, these individuals may have access to assistance programs to help them keep their homes should they experience temporary financial hardships. For example, if you have a Genworth-insured mortgage, you can take advantage of their Homeowner Assistance Program at no extra cost. The program enables you to work with Genworth and your lender to establish alternate arrangements if you’re faced with difficulties that put your mortgage at risk. Visit www.homeownerassistance.ca or ask your lender for details.

Privileges for Homebuyers

As a Genworth-insured mortgage customer, you are eligible for membership into the Homebuyer PrivilegesTM program. This exclusive program provides members with the opportunity to save money on home-related expenses from a variety of national suppliers across Canada. Special offers and discounts are available from retailers such as AMJ Campbell Van lines, Danamark WaterCare, Hertz, Bell, Dell and more. Offers are only available through participating lenders, so be sure to ask them about the program when discussing your mortgage insurance arrangements in order to take advantage of the Homebuyer Privileges program.