What is amazing about this loan insurance is the premium they charge- 7.25% for 100% financing. This will get tacked onto the loan amount so in essence you are borrowing 107.25%. This is available in combination with other products such as 40-year amortization, self-employed and new to Canada programs.
Lets assume an investor took a 100% loan amortized over 40 years for a full duplex costing 500K. Adding the 7.25% premium of $36,250 the investor takes a loan for 536,250. Using an amortization table it would take over 10 years just to pay the premium! I assumed an interest rate of 7% and first payment Jan 2008.
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The funny thing is the renters of this property would be expected to pay security deposit and one months rent to a landlord with absolutely no stake whatsoever.