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What is mortgage insurance? Here’s what it is and how it works



In most cases, the process of buying a home involves taking out a mortgage loan and making a down payment. However, if your down payment is less than 20 percent of your home’s purchase price or you are taking out a particular mortgage (such as an FHA loan), you may also need to buy mortgage insurance. For lenders, these are higher-risk lending situations, so they require mortgage insurance to protect their interests.

Below, we’ll explain the basics of mortgage insurance, including what it covers and who needs it.

What is mortgage insurance?

Mortgage insurance is an insurance policy that protects the mortgage lender and is paid for by the borrower of the loan.

You might be wondering: what does mortgage insurance cover? Usually, when you purchase an insurance plan, it is to provide coverage for you. Mortgage insurance, however, provides coverage for your lender.

With mortgage insurance, the lender or titleholder is covered in case you are unable to pay back the mortgage for any reason. This can include defaulting on payments, failing to meet contractual obligations, passing away or any other number of situations that prevent the mortgage from being completely repaid.

How mortgage insurance works

Now that we’ve covered the definition of mortgage insurance, let’s answer another popular question: How does mortgage insurance work?

In general, you need to pay for mortgage insurance if you put down less than 20 percent on a home purchase. This is because you have less invested in the home upfront, so the lender has taken on more risk giving you a mortgage. How much you’ll pay depends on the type of loan you have and other factors.

Even with mortgage insurance, you are still responsible for the loan, and if you fall behind on or stop making payments, you could lose your home to foreclosure.

Types of mortgage insurance and other fees

The type of mortgage insurance that you’ll need depends on several factors, including the kind of loan that you have. Since mortgage insurance is meant to protect lenders, your lender is responsible for choosing the company that provides your mortgage insurance.

Here’s how these types of mortgage insurance differ, including when they’re paid and how much they cost.

Private mortgage insurance

PMI, or private mortgage insurance, is typically required if you’re obtaining a conventional loan with less than 20 percent down. This can include a 3-percent or 5-percent conventional loan or other type of low-down payment mortgage. Most borrowers pay PMI with their monthly mortgage payment. The cost can vary based on your credit score, loan-to-value (LTV) ratio and other factors.

Mortgage insurance premium

MIP is the mortgage insurance premium required for an FHA loan with less than 20 percent down. You’ll pay for this mortgage insurance upfront at closing, and also annually. The upfront MIP equals 1.75 percent of your mortgage, while the annual MIP ranges from 0.45 percent to 1.05 percent of your mortgage based on the amount you borrowed, LTV ratio and the length of the loan term.

USDA guarantee fee

The USDA guarantee fee is one of the costs you’ll pay to obtain a USDA loan, which is available to borrowers in designated rural areas and has no down payment requirement. The guarantee fee is paid upfront and annually, with the upfront fee equal to 1 percent of the loan and the annual fee equal to 0.35 percent.

VA funding fee

VA loans also have no down payment requirement, but are available exclusively to servicemembers, veterans and surviving spouses. While there is no mortgage insurance required for these loans, there is a funding fee that ranges from 1.4 percent to 3.6 percent of the loan, depending on whether you’re making a down payment (and the size of it, if so) and if this is your first time obtaining a VA loan. This funding fee doesn’t have to be paid in some circumstances.

How much does mortgage insurance cost?

As we’ve covered, your mortgage insurance premium will depend on your loan amount, your LTV ratio and other variables. However, the higher your down payment, the lower your mortgage insurance premium will be.

With PMI, you can expect to pay 0.58 percent to 1.86 percent of the original amount of your loan. That equates to $58 to $186 per month for every $100,000 borrowed.

If you have an FHA loan, your upfront premium is 1.75 percent of your loan amount, while your annual premium ranges between 0.45 percent and 1.05 percent. For a $200,000 loan, your upfront MIP premium would be $3,500, and your annual premium would fall between $900 and $2,000 (paid monthly with your mortgage).

USDA loans come with a 1 percent upfront guarantee fee, as well as an annual fee that’s equal to 0.35 percent of your loan amount. Using the $200,000 loan example, that would come out to $2,000 upfront and $700 annually.

For VA loans, the funding fee will range from 1.4 percent to 3.6 percent, depending on the amount of your down payment and whether or not you’ve taken out a VA loan before. That comes out to $2,800 to $7,200 for a $200,000 loan.

Benefits of mortgage insurance

While mortgage insurance primarily benefits the lender, it does serve a purpose for the borrower because it allows you to get a mortgage with limited down payment savings. Putting down 20 percent can be challenging, especially with home values on the rise, so by paying for mortgage insurance, you can still get a loan without needing a large down payment.

By choosing a mortgage that requires mortgage insurance, you can become a homeowner sooner and at a lower upfront cost. Plus, it allows you to consider homes in other neighborhoods that might not have been in your price range.

Waiting until you have a 20 percent down payment also runs the risk of missing out on favorable mortgage rates. Mortgage insurance offers the ability to get those rates now, meaning you can save on interest over time, despite borrowing more money with a smaller down payment at first.

However, there are downsides to mortgage insurance, as well, mainly that it’s an extra expense you wouldn’t otherwise have to pay, and that it can be difficult to get out of if you have an FHA loan.

How to get rid of mortgage insurance

There are downsides to mortgage insurance as well. The biggest minus is that it’s an extra expense you wouldn’t otherwise have to pay. It can also be difficult to get out of if you have an FHA loan without refinance. If you’re concerned, there are a few options to get rid of your mortgage insurance.

If you have a conventional loan, you can get rid of mortgage insurance simply by paying down your loan. Under the Homeowners Protection Act, lenders are required to cancel your mortgage insurance once your balance reaches 78 percent of the original purchase price or once you reach the halfway point of your amortization schedule (so after 15 years of a 30-year mortgage, for example).

You can also request cancellation before the automatic removal once your balance reaches 80 percent of the original value. Some lenders are receptive to this if you are in good standing with your payments.

For FHA loans, the cancelation guidelines depend on your loan origination date. However, for loans that originate after June 3, 2013, you can’t cancel your mortgage insurance until your mortgage is paid in full – unless you made a down payment of 10 percent or more. In that case, your MIP will end after 11 years.

Lastly, you can try to refinance your mortgage in order to get out of the mortgage insurance, or get your home reappraised to see if it has gained value and the LTV ratio improves. In general, these strategies can work if your home has appreciated significantly since you first took out your mortgage.

Bottom line

When you’re buying a home with a down payment under 20 percent, your lender may require mortgage insurance to protect their financial interests in case you can’t pay back your loan.

Although it may seem like just another hoop to jump through on your journey to homeownership, there are some upsides to choosing a mortgage that requires it. Notably, paying for your property with a combination of a down payment and mortgage insurance makes it easier to become a homeowner – even if you can’t afford to pay 20 percent upfront.

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What is Health Insurance?



Health insurance is insurance coverage that typically pays for medical bills, doctors visits, some prescription drugs and sometimes dental expenses incurred by the insured. If you are planning to study in Canada, you should think about getting international student health insurance coverage for yourself. It is essential that you have a health insurance plan for the duration of your program.

While Canada is well known throughout the world for its free healthcare system, it does not have health insurance coverage for all international students attending school in Canada.

International students who plan to study in Canada should get acquainted with the kind of health care that is obtainable in his proposed province of study since health care plan in the country varies from province to province. While few provinces cover international students under provincial health insurance plans, the majority of other provinces require that students get registered for private health insurance plans.

However, some institutions still demand that students registers with schools’ health insurance plan, others make it optional and students may even decide to decline to register as long as they have a health insurance plan.

Normally, the insurance plan will offer flexibility and freedom, covering all medical needs, emergency health needs, surgery, and other expensive in-patients treatment. Medical evacuation, rehabilitation treatment, and hospital accommodation are also covered in many health insurance packages.

Why Do I Need Health Insurance as International Student?

It’s of great necessity that international students get a health insurance plan. You will agree that studying abroad can be fun and rewarding especially when you are out of the confines of your home, away from your parent; you become your own boss, meet with new friends, learn new languages and culture, explore your new environment and do whatever fascinates your interest.

But traveling and even living in a foreign country also poses unprecedented challenges- from a simple change of weather to an unexpected stomach upset due to a change of diet or even to a more grave danger like having a fatal accident or unexpected injury can get you to the hospital. You need health insurance coverage to take care of all these medical emergencies.If you are a landed permanent immigrant in Canada, consider checking out our article on Newcomers Insurance plan instead.

Benefits of International Student Health Insurance

There are several benefits for securing international student health insurance. Securing good health care coverage saves you from paying those high hospital bills for a long time. Also, the amount you pay is nothing compared to what you would have to pay if you did not have health insurance coverage.

For example, according to Canadian Magnetic Imagining, an MRI scan alone could cost you anywhere around $900 CAD and $2,400 CAD. If you have good health coverage, you will be paying far lesser. International student health insurance often covers pre-existing injuries, sports, injuries, mental health, maternity expenses, hospitalization, and prescriptions.

Students get to enjoy lower premiums compared to older folks since they are generally young and healthy. You get to enjoy more affordable plans. Plus the payment of these premiums can be broken down and paid throughout the duration of your stay.

How Much Is Student Health Insurance in Canada?

Most provinces have free health insurance coverage for International students studying in Canada. Students or visitors who are not covered by free healthcare plans must have health insurance as been made compulsory by Canadian post-secondary schools. Health insurance in Canada for international students varies from province to province or location to location, and it also depends upon the insurance firm.

In line with Canada Insurance Plan, the average yearly premium for accessing health insurance ranges from $600 CAD to $900 CAD. Some of the insurance service providers/companies that foreign students and visitors could approach for health insurance are:

  • Manulife Financial;
  • TuGo;
  • Sun Life;
  • Ingle International;
  • Cowan Insurance Group;
  • Greenshield.
  • Allianz Global;

The insurance packages from these companies include some common benefits (however, the limit of each benefit varies from plan to plan) such as:

  • Physician charges;
  • Private nurse;
  • Trauma counseling;
  • Medical appliances;
  • Treatment of dental accident;
  • Prescription drugs;
  • Paramedical services;
  • Diagnostic services;
  • Psychiatric treatment.
  • Hospital expenses and accommodation;

How to Apply for Student Health Insurance in Canada?

The rules and regulations for health insurance in Canada vary from one province to province. Some Canadian provinces provide health insurance coverage to foreign students as well.

If you have obtained admission to a university or college domiciled in any of these provinces, you need to apply for health insurance by checking the said province’s website, filling and completing an application form, and purchasing the premium amount.

On the other hand, if a province does not provide health insurance coverage for students, you may have to take an overseas health insurance plan from a private firm, before leaving for Canada.

In this case, you will need to reach out to an insurance firm, choose the plan or package that suits your requirements, fill a detailed application form, go through a medical test, and pay the premium amount.

Top 5 Schools that offer student health insurance in Canada

If you are interested in studying in Canada, there are some post-secondary schools that offer a variety of healthcare plans. Below are some schools in Canada that offer special health coverages to their students.

#1. McGill International Student Health Insurance

Mcgill university located in Montreal, Quebec, Canada, is a public university that is well known for its outstanding contribution in the area of scientific research.

McGill is one of the schools on the list of DLIs with an approved COVID-19 readiness plan. The university requires all foreign students and their accompanying dependents to avail themselves in the compulsory McGill International Health Insurance (IHI) coverage which is organized and administered by International Student Services.

In Mcgill, All foreign Students are automatically charged the annual IHI fee ($1128) upon registration at the university in the fall and winter semester.

#2. UBC student health insurance

The University of British strongly recommends that all international students have basic and extended health insurance for the duration of their programs. The BC Medical Services Plan (MSP) is the provincial government program that provides basic health care.

Everyone living in British Columbia province for more than six months is required to enroll in this program, except students with existing health coverage from another province or territory in Canada.

If you come to the province without coverage under MSP or another provincial health plan and will be there for six months or longer, you should enroll for MSP immediately upon your arrival. As there is a three-month processing period before MSP coverage will start, you must make sure you have basic health insurance for those first three months in British Columbia province.

#3. Saskatchewan university student health insurance

The University of Saskatchewan Students’ Union partnered with the health and dental insurance provider Studentcare to offer undergraduate and graduate international students health and dental insurance coverage. Some undergraduate students are automatically enrolled in the plan, while others need to apply.

If you are automatically covered, the cost of the plan is part of your tuition fees. See if you are automatically covered by checking your tuition statements or by visiting

#4. BCIT Student health insurance

Basic medical insurance coverage is compulsory for all international students throughout the duration of their program at BCIT. Students are required to purchase private medical coverage provided by The school does not accept insurance from companies outside of Canada.

#5. Seneca college international student health insurance

As an international student enrolled in a full-time program at Seneca college, you have mandatory health insurance included in your tuition fees. You will be automatically included in the health insurance plan depending on your program start date.

You are expected to pay any outstanding balance at the beginning of your semester. Your health insurance includes services such as hospital and doctor services in Ontario, eye examinations, diagnostic laboratory and x-ray services, emergency services, and dental care in the hospital. The coverage also provides for doctor’s services and hospital ward accommodation.

The coverage includes prescribed drugs, paramedical services such as psychologists, physiotherapists, and more. Limited emergency out-of-country coverage and out-of-province are also included in this plan.

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6 Best cheap car insurance in Ontario for 2022



Car insurance is legally required in Ontario, which is more than enough of a reason for drivers to invest in coverage. However, this is far from the only reason drivers should purchase a policy. Finding the best car insurance in Ontario can save you money on premiums and claims. The average cost of car insurance in Ontario is $763 per year for minimum coverage and $2,098 for full car insurance.Advertising Disclosure

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Ontario is part of San Bernardino County, one of the fastest-growing areas of the Southern California basin. Since 2011, vehicle registrations in the country have grown 16%, outpacing California’s average increase of 11%. Unfortunately, the number of traffic collision victims have also increased. Since 2019, vehicle-related fatalities are up 32%. Bike-related injuries and fatalities are up 46%, all potentially due to distracted driving.

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Finding the cheapest car insurance in Ontario may help you afford enough coverage to protect you against all the potential dangers on the road.

Best car insurance companies in Ontario

The following four carriers are a combination of cheapest car insurance in Ontario and good customer ratings. We used Bankrate’s quote data collected from over 20 Ontario-area insurance providers to find the cheapest carriers. To narrow the list down further, we chose insurance companies with good customer reviews. J.D. Power’s customer satisfaction study was instrumental because it is based on reviews from policyholders regarding the insurer’s claims process, communication and available coverages.

Insurance companyJ.D. Power customer satisfaction score
Average annual premium for minimum coverageAverage annual premium for full coverage
AAA830 / 1,000$576$1,875
GrangeNot rated$584$2,151
Geico828 / 1,000$627$1,797
Wawanesa853 / 1,000$668$1,591


AAA is well-known for providing roadside service and towing to 61 million members nationwide. You get more than just towing for the membership fee — AAA car insurance is also available. The carrier’s policies deliver the cheapest car insurance Ontario rates. Customer service is not sacrificed for lower rates. When it comes to customer satisfaction, AAA earned third place in J.D. Power’s auto insurance study.


Grange Insurance does not rank in J.D. Power’s California study due to its smaller market share. When referencing the National Association of Insurance Commissioner’s insurance complaint index, there were only eight complaints over one year. It is slightly above average, but Grange’s second-lowest minimum car insurance rates in Anaheim tend to offset the complaints. Focusing on what Grange does well, you will find minimum liability and full car insurance as well as gap coverage and insurance for high-end sound equipment and custom accessories.


Geico’s full coverage rates are among the lowest on average. Full coverage is typically more expensive because it adds insurance for your vehicle as well, such as comprehensive and collision insurance. If you drive an older vehicle or one with a low value, you may be fine with low-cost minimum car insurance. But if you have a higher-model vehicle or have assets you would like to financially protect, full coverage car insurance from Geico may be your best bet.


Wawanesa Insurance is #1 in customer satisfaction in the J.D. Power study for California. The carrier is Canada-based and does not have any offices in California, but the website is robust enough to handle most of your car insurance needs online. Some of the optional coverages available include replacement parts using the vehicle manufacturer’s originals and rental expense insurance that can increase your vehicle rental allowance if you would like to rent a larger or more expensive vehicle while your car is in the shop for a covered cause. Ontario drivers should find the coverage they are in search of with Wawanesa.

Cheapest car insurance in Ontario

To get a better idea of how much car insurance costs in Ontario, take not of the following figures:

  • The average annual cost of car insurance in California is $733 for minimum car insurance and $2,065 for full coverage.
  • The national average is $1,674 per year.

Keep the following rates in mind for the cheapest, largest carriers in Ontario based on market share. When shopping around for car insurance, they can provide you with an idea of whether you are paying more for coverage than average. Unless you have a history of accidents and tickets or you are a teen driver, your rates should be relatively close to Bankrate’s findings.

Insurance companyAverage annual premium for minimum coverageAverage annual premium for full coverage

AAA has a couple of nearby chapter offices in Upland and Chino if you would like to visit a local agent. Geico and Mercury typically provide the lowest insurance rates. Travelers and Progressive both have a variety of optional coverages such as rideshare insurance, gap coverage and new car replacement.

Ontario insurance requirements

The State of California requires all vehicle owners, including those residing in Ontario, to have a minimum amount of liability coverage. However, the following requirements should be a starting point. If you total a newer vehicle, $5,000 in property damage coverage does not cover the value of the vehicle, leaving you liable for any damages of $5,000. In addition, your lender or leasing company may require you to carry full car insurance, which could include comprehensive, collision and uninsured/underinsured motorist insurance. California’s insurance requirements are:

  • $15,000 in death and/or bodily injury per person
  • $30,000 in death and/or bodily injury per accident
  • $5,000 for property damage per accident

Car insurance discounts in Ontario

Even if you found a car insurance company in Ontario offering lower rates than you currently pay, you might save further by checking for carrier-specific car insurance discounts. The following could reduce your car insurance bill:

  • Autopay: Automatic payments directly from your account simplifies your life and may earn you a small discount.
  • Bundling: Buying home, renters and/or car insurance from the same company could lower your premiums on all.
  • Young driver: Teens and young adults typically pay the highest rates. Young driver discounts could help parents or independent young adults save money.
  • Switching: If you find lower rates with a different insurance company and decide to change carriers, you may also receive an additional discount for switching.

Bundling and young driver discounts are two of the most effective discounts when you want to significantly reduce your rates.

Frequently asked questions

What is the best car insurance company?

The best car insurance companies in Ontario are different for everyone. Consider the factors that are most important to you and get several quotes to find the best option for you.

How much does car insurance in Ontario cost?

The average cost of car insurance in Ontario is $763 annually for minimum car insurance and $2,098 for full coverage. Rates are slightly higher than Bankrate’s findings of California premiums, averaging $733 for minimum car insurance and $2,065 for full coverage.

How much car insurance do I need in Ontario?

All vehicle owners in Ontario must have liability coverage of at least $15,000 in death and/or bodily injury per person, $30,000 in death and/or bodily injury per accident and $5,000 for property damage per accident.


Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.

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