What is the primary function of mortgage insurers in Canada?

The primary function of mortgage insurers in Canada is to provide insurance for high-ratio mortgages. High-ratio mortgages are those where the borrower has a down payment of less than 20% of the home's purchase price. Because these loans carry a higher risk for lenders, mortgage insurance plays a crucial role in the lending process. By insuring these mortgages, mortgage insurers protect lenders from potential defaults, allowing them to offer more favorable borrowing options to consumers who may not have a large down payment saved. This increases access to homeownership and supports the housing market by facilitating lending to a wider range of borrowers.

In contrast, assessing property values is typically the role of real estate appraisers, not insurers. Managing commercial mortgage agreements falls outside the purview of mortgage insurers, as their focus is primarily on residential mortgages. The regulation of mortgage lenders is handled by government bodies and financial authorities, not directly by mortgage insurers.