What is Conventional Mortgage in Canadian mortgages?

An uninsured mortgage where the borrower has at least 20% down payment (LTV ≤ 80%). No CMHC insurance required. Maximum 30-year amortization. Standard target: LTV ≤ 80%, down payment ≥ 20%. Example: $800,000 home with $160,000 down (20%) = $640,000 mortgage = 80% LTV = conventional.

Conventional Mortgage

Canadian mortgage term definition with formula, examples, and limits used by mortgage brokers.

Definition

An uninsured mortgage where the borrower has at least 20% down payment (LTV ≤ 80%). No CMHC insurance required. Maximum 30-year amortization.

Standard Limit

LTV ≤ 80%, down payment ≥ 20%

Example

$800,000 home with $160,000 down (20%) = $640,000 mortgage = 80% LTV = conventional.

Related Terms

GDSMonthly housing costs divided by gross monthly income. Includes mortgage payment, property tax, heating, and 50% of condo fees.TDSAll monthly debt payments divided by gross monthly income. Includes housing costs plus credit cards, car loans, lines of credit, and other debts.LTVTotal mortgage debt divided by property value. Determines if CMHC insurance is required and which lenders qualify.CMHC InsuranceMandatory mortgage default insurance required when down payment is less than 20% (LTV > 80%). Enables up to 95% LTV financing.Stress TestBorrowers must qualify at a higher interest rate to ensure affordability if rates rise. Calculated as the maximum of contract rate + 2% or 5.25%.

← View all glossary terms

Calculate Conventional Mortgage automatically

BIPS calculates GDS, TDS, LTV, stress test, and CMHC premiums automatically for every lender match.

Try BIPS free →