There are two basic types of mortgages:

Conventional mortgage

The loan amount does not exceed 80% of the property value, defined as the lesser of the purchase price or the appraised value.

High-ratio mortgage, or National Housing Act mortgage

The amount is more than 80% of the property value (up to 95%). By law, a high-ratio mortgage must be insured against borrower default. The borrower pays a mortgage insurance premium (a percentage of the total loan amount) which can be added to the mortgage loan or paid in a lump sum in advance. The borrower must also pay an insurance application fee.

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