Insured, insurable, uninsurable: why do mortgage rates differ?

In Canada, lenders sort mortgages into three groups, and the group affects the lender's risk and funding cost, a large part of why rates can differ between borrowers. Insured means less than 20% down, with a default insurance premium paid; insurable means 20% or more down, but the mortgage would meet the insurance rules. Uninsurable means the mortgage could not be insured, such as a refinance or a home priced at $1.5 million or more.

Insured: less than 20% down

Default insurance protects the lender, not you, if you stop paying. With less than 20% down, insurance is required, and you pay a premium. For CMHC, the premium is a percentage of the loan, for example 3.10% when you borrow 85.01% to 90% of the price, and 4.00% between 90.01% and 95% (source: CMHC, checked October 2026). The premium is usually added to the mortgage. You pay Ontario's 8% sales tax on the premium in cash at closing.

Insured mortgages have firm limits on price and on amortization, the total time to pay the loan off. The purchase price must be under $1.5 million (the cap since December 15, 2024), and the amortization has a maximum, with up to 30 years allowed for first-time buyers and buyers of new builds (source: Department of Finance). Because an insurer carries the default risk, lenders often price insured mortgages more sharply.

Insurable: 20% or more down, inside the rules

If you put 20% or more down, you do not need insurance and pay no premium. If your mortgage would still fit the insurance rules, lenders generally call it insurable. Insurable means, for example, a price under $1.5 million, an amortization within the insured limits and a home you will live in.

Lenders may insure these mortgages themselves, in bulk and at their own cost, which can lower what it costs them to fund the loan. Bulk insurance is general practice rather than a published rule, and how each lender handles it varies. As a result, an insurable mortgage is often priced closer to an insured one than to an uninsurable one.

Uninsurable: everything else

A mortgage is generally uninsurable when it could not be insured even if someone wanted to. Common examples:

• a home priced at $1.5 million or more, which also needs at least 20% down;
• a refinance, where you borrow against your home's equity, generally treated as uninsurable;
• a rental property you will not live in, which generally needs at least 20% down because insurance is for owner-occupied homes;
• an amortization longer than the insured limits allow.

The lender carries all the risk on an uninsurable mortgage, and many lenders price them higher as a result. The details vary by lender.

Why the insurance group matters when you compare

Two people can see different rates from the same lender on the same day, and both can be right. A rate advertised for an insured purchase may not apply to your refinance. When you compare offers, it helps to know which group your mortgage falls into, so you compare like with like.

The insurance group can also change a decision at the margin. A slightly longer amortization or a refinance can move a mortgage from insurable to uninsurable. We show you where that line falls before you choose.

What to do next

To see the premium on an insured purchase, try the CMHC premium calculator; results are estimates only, not an offer or advice. Or use our call-me-back form and we will tell you which group your mortgage falls into, subject to lender approval.