Mortgage insurance and home insurance are two very different things. Home insurance protects you financially if something happens to your home for which you're covered. For example, if your home is damaged or destroyed by fire or your dishwasher leaks and floods your house. Whereas mortgage insurance protects the lender in case someone can’t make their mortgage payments.
According to the Canada Mortgage and Housing Corporation (CMHC), mortgage insurance is mandatory if the down payment is less than 20% of the full cost of your home7. Considering the size of the investment when you are purchasing a new home, it would be advisable to always have home insurance. If your home is mortgaged, your lender will require you to carry home insurance at all times.
Exhilarated. Excited. And probably nervous. These are just some of the feelings you’ll most likely experience when you’re buying your first home. But it’s all worth it in the end. Because eventually you’ll feel confident once you’ve gone through the process. You’ve done your homework and now hopefully you’re one step closer to getting approved. Then the real fun begins – the search for your future home.
Want to know more? Here are more really helpful and practical things to consider when you’re in the process of buying a new home.