Conventional Mortgage

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Definition: Conventional Mortgage

A conventional mortgage is a loan usually in property dealings where the down payment is at least 20% of the property value or the loan amount is less than 80% of the market value of the property. If the loan amount exceeds this limit, it is called “high-ratio” mortgage.

Since in conventional mortgage, the loan amount is comparatively small, the bank face s less risk and the repayment installations are more in favor of the borrower and carry low interest rates.

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