Why Your Mortgage Default Insurance Could Be the Hidden Lifeline You Didn’t Know You Had

When you buy a home with less than 20% down, mortgage default insurance is mandatory.
Most people assume it's just something that protects the lender — not them.

But what many homebuyers don't realize is that default insurance often comes with built-in protections for homeowners, too.
Some insurers offer valuable support programs that can help you keep your home if financial hardship strikes — at no extra cost.

Understanding these features now could make all the difference later.

Default Insurance: More Than Lender Protection

Default insurance was originally designed to protect lenders if borrowers defaulted on their mortgages.
But over time, many insurers have recognized that keeping homeowners in their homes is a win-win for everyone.

That’s why some insurers have introduced assistance programs to help homeowners through temporary financial troubles — like a job loss, illness, divorce, or natural disaster.

These programs typically work by:

• Offering payment deferrals during a tough period
• Extending amortization periods to lower payments
• Setting up shared payment plans (where the insurer covers part of the mortgage payment)
• Adding missed payments to the loan balance (capitalizing arrears)
• Restructuring mortgage terms to fit a new financial reality

In short, your default insurance may quietly give you options to avoid foreclosure and protect your credit — if you ever need it.

An Example: Sagen’s Homeowner Assistance Program (HOAP)

One well-known example of these homeowner support programs is Sagen’s Homeowner Assistance Program (HOAP).

If you have a Sagen-insured mortgage, HOAP is automatically available to you at no additional cost.
It’s specifically designed to support homeowners facing temporary financial hardships, helping them work with their lender to stay in their home.

Sagen reports that over 63,000 Canadian families have avoided losing their homes through HOAP, with a success rate of over 90%.

Other insurers may offer similar programs with slightly different names or options — the key is knowing what’s available on your mortgage.

Why This Matters for Homebuyers

When you're putting down less than 20%, you’re already taking a big step toward homeownership.
Knowing that your default insurance can act as a safety net if unexpected hardships arise can provide extra peace of mind.

It’s one more reason to have a conversation with your mortgage broker or lender about:

• Who your mortgage insurer is
• What homeowner assistance features come with your insurance
• How to access help if you ever face financial trouble

Too often, homeowners only learn about these programs when it’s almost too late.
Being informed early gives you an important advantage — and could one day protect your biggest investment.

Final Thought

Default insurance isn't just there to protect lenders.
In many cases, it's designed to help protect you, too — offering real support if you hit a rough patch.

Before you close on your mortgage, ask your mortgage broker:
👉 “What homeowner support programs are included with my mortgage insurance?”

It’s a small question that could make a huge difference if you ever need it.