Insured vs uninsured mortgage rates: why your quote doesn't match what you see online
When you see a 4.0% rate advertised online and your actual quote comes back at 4.5%, you’ve usually run into Canada’s mortgage insurance tier system. There are three of them, and lenders price each at a different rate.
The three tiers
Insured: down payment under 20%, purchase price under $1,500,000, owner-occupied or second home. The borrower pays a CMHC, Sagen, or Canada Guaranty premium (2.8–4.0% of the loan, financed in). The insurer takes default risk. Cheapest rate tier — lenders don’t carry the loss risk.
Insurable (sometimes called “low-ratio insured”): down payment of 20% or more, but the lender chooses to insure the mortgage in bulk on the back end (the borrower doesn’t pay a premium). Conditions: ≤25-year amortization, owner-occupied, ≤$1,500,000 purchase price. Cheaper than uninsured, more expensive than insured — usually 0.10–0.20 percentage points above insured.
Uninsured: anything that doesn’t qualify above. 20%+ down with a 30-year amortization. Rental properties. Refinances. Purchases over $1,500,000. Most expensive tier — typically 0.20–0.40pp above insured.
What this means in practice
The “best 5-year fixed” rate you see on most rate-comparison sites — including this one’s headline figures — is the insured rate. If you’re putting down 20%+, you do not get that rate.
To know which tier you’ll actually be quoted:
- Putting down less than 20%? You’re insured. Lowest rate, but you pay the CMHC premium.
- Putting down 20%+ on a primary residence under $1.5M with a 25-year amortization? Insurable. You don’t pay a premium, but your rate is slightly above the insured headline.
- 30-year amortization, rental property, refinance, or home over $1.5M? Uninsured. Highest tier.
A typical 5-year fixed today might quote 4.05% insured, 4.20% insurable, 4.40% uninsured — same lender, same week.
The 30-year amortization tax
In December 2024, the federal government extended insured 30-year amortizations to first-time buyers and new-build buyers. For everyone else, choosing a 30-year amortization (lower payment, but more interest paid over time) bumps you into the uninsured tier with its rate premium.
Run the math both ways. The lower payment of a 30-year amortization rarely covers the rate premium plus the extra decade of interest. The 25-year amortization is usually the better total-cost answer if you can afford the payment.
What to do with this
When asking for quotes, specify your tier upfront: “My down payment is X%, amortization is Y years, primary residence.” Otherwise lenders will quote you the insured rate to win the conversation, then “rebrief” you when they realise you don’t qualify for it.
The published rate comparison on this site assumes the insured tier unless otherwise noted. Add 0.10–0.20pp for insurable, 0.20–0.40pp for uninsured to estimate your real quote. Always confirm the tier in your written rate offer before committing.