Three Mortgage Categories in Canada
| Feature | Insured | Insurable (Uninsured) | Uninsurable |
|---|
| Down payment | 5–19.99% | 20%+ | 20%+ |
| Mortgage insurance | Required (buyer pays) | Optional (lender pays) | Not available |
| Max purchase price | $1,499,999 | $1,499,999 | No limit |
| Max amortization | 25 years | 25 years | 30+ years available |
| Who pays insurance? | Buyer (added to mortgage) | Lender (if they choose) | N/A |
| Stress test | Qualifying rate or contract + 2% | Same | Same |
| Typical rate | Lowest | +0.10–0.20% higher | +0.15–0.40% higher |
| Available from | All lenders | Most lenders | Select lenders |
How It Affects Your Mortgage Rate
| Mortgage Amount | Insured Rate | Insurable Rate | Uninsurable Rate | Monthly Difference |
|---|
| $400,000 | 4.29% | 4.39% | 4.54% | $21–$46 |
| $500,000 | 4.29% | 4.39% | 4.54% | $27–$58 |
| $600,000 | 4.29% | 4.39% | 4.54% | $32–$69 |
| $800,000 | N/A | 4.39% | 4.54% | $55 |
While the rate differences appear small, over a 25-year amortization they add up significantly.
Insured Mortgages (High-Ratio)
When Your Mortgage Is Insured
| Condition | Requirement |
|---|
| Down payment | Less than 20% |
| Purchase price | Under $1,500,000 |
| Amortization | 25 years or less |
| Property type | Owner-occupied |
| Borrower credit score | 600+ (varies by insurer) |
| Stress test | Must qualify at higher of contract rate + 2% or qualifying rate |
CMHC Insurance Premiums
| Down Payment | Premium (% of Mortgage) | Premium on $500K Mortgage |
|---|
| 5% (up to $500K) | 4.00% | $19,000 |
| 10% | 3.10% | $13,950 |
| 15% | 2.80% | $11,900 |
| 19.99% | 2.40% (approx.) | — |
| 20%+ | $0 (no insurance required) | $0 |
Who Provides Mortgage Insurance?
| Insurer | Market Share (Approx.) | Notes |
|---|
| CMHC (Canada Mortgage and Housing Corporation) | ~50% | Government-owned Crown corporation |
| Sagen (formerly Genworth) | ~30% | Private company, publicly traded |
| Canada Guaranty | ~20% | Private company |
Insurable (Uninsured) Mortgages
When Your Mortgage Is Insurable
| Condition | Requirement |
|---|
| Down payment | 20% or more |
| Purchase price | Under $1,500,000 |
| Amortization | 25 years or less |
| Property type | Owner-occupied or rental (some insurers) |
| New purchase | Yes (not a refinance) |
| Stress test | Must qualify at qualifying rate |
Why It Matters
Even though the borrower doesn’t pay for insurance, the lender may choose to insure the mortgage at their own expense (called “portfolio insurance” or “bulk insurance”). This costs the lender about 0.5-2.5% of the mortgage amount. Lenders pass some of this cost on through slightly higher rates.
The borrower’s benefit: slightly lower rates than uninsurable, because the lender can reduce their capital requirements.
Uninsurable Mortgages
When Your Mortgage Is Uninsurable
| Trigger | Details |
|---|
| Amortization over 25 years | 30-year amortization = uninsurable |
| Purchase price $1,500,000+ | Properties above the insurable threshold |
| Refinance | All refinances are uninsurable |
| Rental property (some cases) | Some insurers don’t cover rental purchases |
| Non-owner-occupied | Investment properties may be uninsurable |
| Previous default history | Borrowers with certain credit events |
Rate Impact
Uninsurable mortgages carry the highest rates because lenders must hold more capital and bear all default risk:
| Mortgage Type | Typical 5-Year Fixed Rate | Spread Above Insured |
|---|
| Insured | 4.29% | — |
| Insurable | 4.39–4.49% | +0.10–0.20% |
| Uninsurable | 4.54–4.69% | +0.25–0.40% |
Common Scenarios and Classification
| Scenario | Down Payment | Purchase Price | Amortization | Classification |
|---|
| Buying $500K home, 5% down | $25,000 | $500,000 | 25 years | Insured |
| Buying $500K home, 20% down | $100,000 | $500,000 | 25 years | Insurable |
| Buying $500K home, 20% down | $100,000 | $500,000 | 30 years | Uninsurable |
| Buying $1.2M home, 20% down | $240,000 | $1,200,000 | 25 years | Insurable |
| Buying $1.6M home, 20% down | $320,000 | $1,600,000 | 25 years | Uninsurable |
| Refinancing $400K mortgage | N/A | N/A | Any | Uninsurable |
| Buying rental property, 20% down | $80,000 | $400,000 | 25 years | Depends on insurer |
Down Payment Rules and Minimum Thresholds
| Purchase Price | Minimum Down Payment | Mortgage Category |
|---|
| Up to $500,000 | 5% | Insured |
| $500,001–$999,999 | 5% on first $500K + 10% on remainder | Insured |
| $1,000,000–$1,499,999 | 20% | Insurable |
| $1,500,000+ | 20% | Uninsurable |
Down Payment Examples
| Purchase Price | Minimum Down Payment | Amount | Category |
|---|
| $400,000 | 5% | $20,000 | Insured |
| $600,000 | 5% of $500K + 10% of $100K | $35,000 | Insured |
| $800,000 | 5% of $500K + 10% of $300K | $55,000 | Insured |
| $1,000,000 | 20% | $200,000 | Insurable |
| $1,500,000 | 20% | $300,000 | Uninsurable |
| $2,000,000 | 20% | $400,000 | Uninsurable |
Total Cost Comparison
| Item | Insured (10% down) | Insurable (20% down) | Uninsurable (20% down, 30yr) |
|---|
| Home price | $500,000 | $500,000 | $500,000 |
| Down payment | $50,000 | $100,000 | $100,000 |
| Mortgage | $450,000 | $400,000 | $400,000 |
| CMHC premium | $13,950 | $0 | $0 |
| Total mortgage | $463,950 | $400,000 | $400,000 |
| Rate | 4.29% | 4.39% | 4.59% |
| Monthly payment | $2,525 | $2,178 | $2,069 |
| Total interest (full term) | $293,511 | $253,329 | $344,878 |
| Total cost (mortgage + interest + premium) | $757,461 | $653,329 | $744,878 |
Key insight: Despite paying CMHC insurance, the insured mortgage gets the best rate. But the insurable mortgage (20% down) has the lowest total cost because you avoid the insurance premium and borrow less. The uninsurable 30-year amortization has the lowest monthly payment but the highest total interest.
Which Is Best for You?
| Situation | Best Option | Why |
|---|
| First-time buyer, limited savings | Insured (5–10% down) | Get into the market with lowest rate |
| Have 20% saved, home under $1.5M | Insurable (20% down) | Lowest total cost, no insurance premium |
| Want lowest monthly payments | Uninsurable (30-year amortization) | Lower monthly, but higher total cost |
| Home is $1.5M+ | Uninsurable | Only option |
| Refinancing existing mortgage | Uninsurable | Refinances are always uninsurable |
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