What is the maximum loan-to-value (LTV) ratio for a non-NHA insured loan through a life insurance company?

In Canada, the maximum loan-to-value (LTV) ratio for a non-NHA insured loan through a life insurance company is typically set at 75%. This means that the lender will finance up to 75% of the appraised value of the property while requiring the borrower to cover the remaining 25% through a down payment.

This LTV ratio reflects the risk management strategy employed by life insurance companies, as they aim to limit their exposure to potential losses in case the borrower defaults. By requiring a lower LTV ratio, these institutions ensure that there is sufficient equity in the property, which provides a buffer to protect the lender's investment.

In the context of other available options, higher LTV ratios, such as 80% or 90%, tend to be found in government-backed or insured loan programs, where the risk is mitigated through insurance. A lower LTV ratio, like 70%, is also conservative but does not represent the typical maximum for non-NHA insured loans specifically with life insurance companies.

It is essential for prospective borrowers to be aware of these limitations, as it directly affects their borrowing capacity and the amount of down payment they will need to make.