Protect Your Home, Secure Your Legacy
Your home is more than just a place—it’s your family’s foundation. Mortgage insurance from RP Finance ensures that your loved ones won’t have to worry about mortgage payments if something happens to you. In the event of death, disability, or a serious illness, this coverage helps pay off the remaining mortgage balance, so your family can stay in their home without added financial stress. It’s a smart, reliable way to safeguard your legacy and keep what matters most safe.
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Understanding Mortgage Insurance in British Columbia
Mortgage insurance is an important part of homeownership, especially for those who may not have a large down payment. In British Columbia, where property prices can be high, mortgage insurance provides financial protection for both lenders and borrowers, helping more people access the housing market with confidence. This guide will help you understand the essentials and benefits of mortgage insurance in British Columbia.
What Is Mortgage Insurance?
Mortgage insurance is designed to protect the lender, not the borrower, if the borrower defaults on their mortgage loan. In Canada, including British Columbia, mortgage insurance is typically required when the homebuyer puts down less than 20% of the home’s purchase price. It’s commonly referred to as CMHC insurance, named after the Canada Mortgage and Housing Corporation, one of the main providers.
Types of Mortgage Insurance
There are different kinds of insurance related to your mortgage, and it’s important to understand the distinction:
Mortgage Default Insurance
Description: Mandatory for high-ratio mortgages (less than 20% down payment).
Provider: Offered by CMHC and other insurers like Sagen and Canada Guaranty.
Benefits: Allows buyers to purchase a home with a lower down payment and potentially lower interest rates.
Mortgage Life Insurance
Description: Optional insurance that pays off your mortgage balance if you die.
Benefits: Provides peace of mind that your family won’t be burdened with mortgage debt in the event of your death. Mortgage Disability or Critical Illness Insurance
Description: Pays your mortgage if you’re unable to work due to illness or disability.
Benefits: Protects your home in case of unexpected health challenges.
Why Mortgage Insurance Matters Whether mandatory or optional, mortgage insurance can offer significant value:
Home Accessibility: Makes it possible for more people to enter the housing market with smaller down payments.
Risk Reduction: Protects lenders, which helps maintain stability in the housing finance system.
Family Protection: Optional mortgage life insurance ensures your loved ones don’t inherit debt. Peace of Mind: Helps homeowners stay in their homes through illness, disability, or death.
Choosing the Right Mortgage Insurance
When considering mortgage insurance in British Columbia, keep these factors in mind:
Down Payment Size: If under 20%, mortgage default insurance is mandatory.
Personal Health and Life Situation: Life, disability, or critical illness coverage can offer added protection.
Cost: Mortgage default insurance is calculated as a percentage of your loan and can be added to your mortgage.
Comparison: Shop around or consult a broker to explore private options that may offer better rates or coverage terms than bank-provided insurance.
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