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A low-ratio mortgage, also known as a conventional mortgage, is one that does not exceed 80% the property’s appraised value. In other words, a low-ratio mortgage is one in which the borrower has at least 20% equity.

By comparison, mortgages with less than a 20% down payment are called high-ratio mortgages. Unlike high-ratio mortgages, mortgage default insurance is not mandatory by law for low-ratio mortgages.

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