When buying a property in London, Ontario, your down payment plays a key role in determining your eligibility under insured, insurable, or uninsured programs.

Insured mortgages in London start with a minimum 5% down payment for a purchase price up to $500,000. For properties priced above $500,000 and up to $1,000,000, a 10% down payment is required on the amount exceeding $500,000, in addition to the initial 5%. The maximum allowable Gross Debt Service (GDS) ratio is 39%, and the maximum Total Debt Service (TDS) ratio is 44%. The insurance premium against default is added to the mortgage amount, and the amortization period is capped at 25 years. These are typically the lowest rates available due to the reduced risk to the lender.

Insurable mortgages in London are available through several banks, credit unions, and monoline lenders, which are often referred to as back-end insured mortgages. In this case, the lender will qualify the purchase under a 25-year amortization with a GDS ratio of 39% and a maximum TDS ratio of 44%. However, the down payment for this program must be a minimum of 20%, and the larger your down payment, the better your rate.

Uninsured mortgages in London allow for an amortization period of up to 30 years and require a minimum of 20% down payment. These mortgages generally carry higher interest rates compared to insured and insurable mortgages, due to the lender's increased risk. Refinancing is typically treated as an uninsured mortgage, and most lenders will offer home equity lines of credit under this program.

For mortgage renewals, if you have a low loan-to-value ratio, an active default insurance policy, and haven’t changed the amortization since your purchase, your London property may qualify for a lower renewal rate.

To ensure you qualify for the right mortgage product and lowest rate, contact our experienced mortgage brokers for guidance and support.