A conventional mortgage is a mortgage loan that is equal to, or less than, 80% of the lending value of the property. The lending value is the property’s purchase price or market value — whichever is less. For a conventional mortgage, the down payment is at least 20% of the purchase price or market value.
If your down payment is less than 20% of the home price, you will typically need a high-ratio mortgage. A high-ratio mortgage usually requires mortgage loan insurance. CMHC is a major provider of mortgage loan insurance. Your lender may add the mortgage loan insurance premium to your mortgage or ask you to pay it in full upon closing.
Open or Closed Mortgage
An open mortgage allows you to pay off your mortgage in part or in full without any penalties at any time. Also, you have the option to renegotiate your mortgage at any time. There is more flexibility in an open mortgage, however it is at a higher interest rate.
A closed mortgage has less flexibility than an open mortgage. Some lenders may allow additional payments without penalty. A closed mortgage typically has a lower interest rate than an open mortgage.
Amoritization refers to the length of time that you will pay your mortgage off in. Typically, the longer the amoritization, the less the amount of your payments will be. However, keep in mind, the shorter the amortization, the higher your interest costs will be.