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When you buy an owner occupied property in Canada, you are required to make a minimum down payment of 5% of the purchase price.

A 5% down payment means that 95% of the property is being financed and these mortgages are referred to as High Ratio in nature. All High Ratio mortgages in Canada require Default Mortgage Insurance which means that an insurance premium is added to one's mortgage. In most cases though, the premium doesn't have a signifigant impact on the amount of the monthly payments.

The government believes that a client making a smaller down payment equates to them being at higher risk of defaulting on the payments. This in reality, doesn't make alot of sense as people may choose to put down a smaller down payment for any number of reasons. It is however, a non negotiable policy that the federal government requires all banks to follow.

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