Quote:
Originally Posted by ken0042
Why is that? I can see it when the amount you are borrowing is close to the 80% threshold. But when I renewed my mortgage a couple of years ago I was just under 50%. Isn't that also risk free for the lender? The economy would have to tank so bad for my house to lose that much.
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Because an additional amount gets tacked onto the mortage (4% IIRC, but I think it depends on your DP) as the insurance premium.
I'm not sure if the amortization table works any differently, but I'd imagine that insurance premium gets paid off early. So basically the risk is already paid for - out of your own pocket.