A conventional mortgage is a “typical” mortgage where you have a down payment of at least 20% of the purchase price/value of your new home.
Interest rates are determined based on the Loan-to-Value (LTV) and, contrary to a high-ratio mortgage, you do not usually need to pay an additional insurance premium.
Another advantage of this program is that there is more leniency with the amortization period (i.e., the amount of time required to pay back the mortgage loan). While amortization is usually capped at 25 years for high-ratio mortgages, lenders typically go to 30 years on conventional mortgages. In fact, we work with some lenders that can go as high as 40 years! While longer amortizations can mean lower payments, this isn’t always the best solution.
Contact us if you would like to learn more about conventional mortgages and if you would like to discuss whether a longer amortization might be beneficial to your unique situation.
