What is the maximum insurable LTV ratio under the Canada Mortgage and Housing Corporation (CMHC) guidelines?

The maximum insurable loan-to-value (LTV) ratio under the Canada Mortgage and Housing Corporation (CMHC) guidelines is indeed 95%. This means that homebuyers can obtain CMHC mortgage insurance on loans with an LTV up to 95%, allowing them to finance up to 95% of the property's value.

This high LTV ratio is particularly beneficial for first-time homebuyers or those with limited savings, as it lowers the barrier to entry for homeownership by reducing the amount of down payment required. Typically, mortgage insurance is necessary when the LTV exceeds 80%, and CMHC’s insurance helps lenders mitigate their risk when granting loans that are higher risk due to the lower equity position of the borrower.

By allowing a maximum LTV of 95%, CMHC supports broader access to home financing, contributing to housing affordability in Canada. Understanding this guideline is crucial for mortgage professionals, as it affects their clients' ability to qualify for loans and the insurance requirements associated with them.