Abstract:Mortgage insurance means that the institution or organization established by law signed a security contract with the lender for qualified borrowers applying for low down payment mortgages. Its main function is to provide credit support for qualified borrowers applying for low down payment mortgages, that is lower the threshold for borrowers to buy houses. But it may also increase transaction costs and social costs, induce moral hazard of both lenders and borrowers, ruduce efficiency of mortgage market.