Do I have to take out a mortgage insurance?

The answer is: no. However, you need to make sure that you have enough protection in case of death, serious illness or disability.

There are different types of insurances that protect you against unplanned events. Depending on your situation, you may choose to buy only some of the protections that are available to you:

• A fixed insurance protection for your mortgage with a fixed premium for the entire duration of the contract will protect you and your family in case of death. The difference between the insurance amount and your mortgage balance would then benefit your family. You should note that you can transfer this type of protection of you ever change your mortgage lender.
• A disability protection will cover your monthly mortgage payment if you should find yourself unable to work due to illness or a wound. Normally, this type of insurance will cover your payments for 2 years or until you reach the age of 65.
• An insurance against serious illnesses (cancer, heart attack or cerebrovascular accident) will take effect as soon as you have been diagnosed.

It is important to know that banks use a fixed rate to calculate your premium, which will therefore remain the same for the entire duration of the mortgage loan. E.g., the premium will be the same for $200,000, $100,000 and $25,000. Pay attention if a percentage is added to your mortgage rateyou’re your insurance instead of a fixed amount. Add the numbers carefully, because your insurance may end up costing you a lot. Also note that your premium may vary depending on your age.

So make sure to be well insured and well informed!