Which type of mortgage does not require mortgage default insurance if the down payment is 20% or more?

A conventional mortgage loan is designed for situations where the borrower makes a down payment of 20% or more of the purchase price. This type of mortgage does not require mortgage default insurance, which is a requirement for high-ratio mortgages that have lower down payments. Since the borrower has a significant equity stake in the property with a 20% or more down payment, lenders are generally more willing to assume the risk without insurance.

In contrast, high-ratio mortgages require mortgage default insurance because they involve lower down payments (typically less than 20%), increasing the lender's risk. Both adjustable-rate and fixed-rate mortgages can be classified under either conventional or high-ratio types based on the down payment percentage, but they do not dictate whether insurance is necessary. Rather, it is the level of the down payment that determines the insurance requirement, solidifying the rationale that a conventional mortgage loan becomes the correct answer in this context.