High-Ratio Mortgage

A high-ratio mortgage in BC is a residential mortgage where the borrower's down payment is less than 20% of the purchase price. Because the loan-to-value ratio exceeds 80%, federal regulations require the mortgage to be insured against default by an approved insurer — CMHC, Sagen, or Canada Guaranty. The insurance premium is paid by the borrower and is typically added to the mortgage principal rather than paid upfront.

In BC, as elsewhere in Canada, mortgage default insurance for high-ratio mortgages must be obtained from one of three federally approved providers: Canada Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), or Canada Guaranty. The lender arranges the insurance, but the cost of the premium is borne by the borrower. Buyers should consult current insurer guidelines for eligible property types, qualifying criteria, and premium rate schedules, as these can change.

Under federal mortgage insurance rules, default insurance is only available for properties with a purchase price below the federally set threshold; consult current federal government or lender guidance for the exact figure in effect in 2026, as this limit has been subject to revision. Properties priced at or above the threshold are not eligible for default insurance, meaning buyers must provide a down payment of at least 20% to obtain conventional financing. This cap applies province-wide, including in high-cost BC markets such as Metro Vancouver and Victoria.

A high-ratio mortgage does not reduce or eliminate the Property Transfer Tax (PTT) payable under the BC Property Transfer Tax Act. PTT is calculated on the fair market value of the property at standard rates — 1% on the first $200,000, 2% on the portion up to $3,000,000, and 3% on the portion above $3,000,000, with an additional 2% on residential property value exceeding $3,000,000. Separate exemptions, such as the First-Time Home Buyers' Program (full exemption for properties up to $835,000) or the Newly Built Home Exemption (up to $1,100,000), may apply independently of the mortgage structure.

Yes, a high-ratio mortgage can generally be used to purchase a strata lot in BC, provided the property and borrower meet the insurer's eligibility criteria. Strata lots are governed by the Strata Property Act (SBC 1998, c. 43), and lenders or insurers may review strata corporation documents — such as the Form B Information Certificate, depreciation report, or contingency reserve fund status — when assessing the property's insurability and lending risk. Buyers and their representatives should obtain all required strata documents before financing decisions are finalized.

BC real estate licensees are governed by the Real Estate Services Act (RESA) and BCFSA Rules, which require licensees to act in clients' best interests and provide them with all known material information. While the classification of a mortgage as high-ratio is primarily a matter for lenders and insurers, a licensee should ensure clients understand the implications of their down payment level — including the requirement for default insurance — as part of their general duty of disclosure. Licensees should not provide mortgage or financial advice beyond their area of expertise, and should refer clients to a licensed mortgage professional for specific financing guidance.

BC does not use a power-of-sale process; mortgage default enforcement in BC is judicial in nature and governed by the BC Supreme Court Civil Rules and the Law and Equity Act. If a borrower defaults on a high-ratio mortgage, the lender may commence foreclosure proceedings through the BC Supreme Court, which can result in an order nisi, a redemption period, and ultimately an order absolute or a court-ordered sale. Because the mortgage is insured, the insurer (CMHC, Sagen, or Canada Guaranty) compensates the approved lender for losses after the foreclosure process is complete, then may seek recovery from the borrower.

The mortgage structure — whether high-ratio or conventional — does not itself affect PTT eligibility or calculation under the BC Property Transfer Tax Act. First-time buyers may qualify for the First-Time Home Buyers' Program exemption, which provides a full PTT exemption for eligible properties up to $835,000 and a partial exemption up to a higher threshold, regardless of down payment size. Eligibility for that exemption is based on the buyer's residency status, prior property ownership history, intended use of the property, and the property's purchase price — not on whether mortgage default insurance is required.

Whether a buyer obtains a high-ratio mortgage or a conventional mortgage is a financing matter separate from the land-use restrictions that apply to Agricultural Land Reserve properties. ALR land is governed by the Agricultural Land Commission Act (SBC 2002, c. 36) and regulated by the Agricultural Land Commission (ALC), which imposes restrictions on non-farm use, subdivision, and non-adhering residential use. Buyers considering ALR property should contact the ALC directly for guidance on permitted uses and any applicable restrictions, as these land-use rules exist independently of the mortgage structure.

If a borrower holding a high-ratio mortgage dies, the mortgage debt becomes a liability of their estate, administered under the Wills, Estates and Succession Act (WESA) of BC. The executor or administrator of the estate is responsible for addressing secured debts, including the outstanding insured mortgage, in the course of administering the estate — which may involve selling the property, refinancing, or transferring the mortgage to a surviving joint tenant or beneficiary, depending on how title was held. If the property was held in joint tenancy, the right of survivorship operates outside the estate, but the mortgage obligation remains registered against the title and must still be addressed.