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What is mortgage default insurance, and when is it required?

Author: Keith Uthe Demystifying Mortgages |

Mortgage default insurance, also known as mortgage insurance, is required for homebuyers with a down payment of less than 20% of the purchase price. This insurance protects the lender in case the borrower defaults on the mortgage. It is provided by mortgage insurance providers like Canada Mortgage and Housing Corporation (CMHC) or Genworth Canada.