If you've been comparing Canadian mortgage rates, you've probably noticed that some rates are noticeably lower than others. The difference often comes down to one word: insured. Understanding how insured mortgages work is one of the most effective ways to secure a lower rate—and save thousands over your mortgage term. What Is an Insured Mortgage? An insured mortgage is a home loan that's backed by mortgage default insurance, provided by one of Canada's three authorized insurers: CMHC (Canada Mortgage and Housing Corporation) — government-owned Sagen (formerly Genworth) — private insurer Canada Guaranty — private insurer This insurance protects the lender (not you) if you default on your payments. Because the lender's risk is eliminated, they offer significantly lower interest rates on insured mortgages. When Is Insurance Mandatory? Mortgage default insurance is required by law when your down payment is less than 20% of the purchase price. But even though you're paying for the insurance, the lower rate often makes it worthwhile. Typical Rate Advantage 5%–19.99% Yes (mandatory) 0.10%–0.30% lower than uninsured 20%+ No (but lender may bulk-insure) See "insurable" category Current Insured Mortgage Rates Insured rates are consistently the lowest available in Canada because lenders carry zero default risk. → See today's best insured rates: View current rate table → Get your personalized insured rate: Apply free at /apply/ — we compare 50+ lenders in 2 minutes. Who Qualifies for an Insured Mortgage? To get an insured mortgage in Canada, you must meet these requirements: Purchase Price Limits Max Amortization First-time buyer (any property) $1,500,000 30 years New construction (any buyer) $1,500,000 30 years Resale home (repeat buyer) $1,000,000 25 years Additional Requirements Owner-occupied: The property must be your primary residence Stress test: You must qualify at the higher of 5.25% or your contract rate + 2% GDS/TDS ratios: Maximum 39% GDS and 44% TDS Credit score: Minimum 600 (680+ for best rates) Property type: 1–4 unit residential (no commercial) CMHC Insurance Premium Rates The premium is calculated as a percentage of the mortgage amount (not the purchase price) and depends on your loan-to-value (LTV) ratio: Example on $500K Home 5% ($25,000) 95% 4.00% $19,000 10% ($50,000) 90% 3.10% $13,950 15% ($75,000) 85% 2.80% $11,900 20%+ ($100,000) 80% or less Not required $0 How the Premium Is Paid The premium is almost always added to your mortgage balance (you don't pay it upfront) In Ontario, you also pay 8% PST on the premium — this is due at closing and cannot be added to the mortgage The premium is a one-time cost — it does not recur Example: $600,000 Home with 5% Down Item Amount Purchase price $600,000 Down payment (5%) $30,000 Mortgage before insurance $570,000 CMHC premium (4.00%) $22,800 Total mortgage $592,800 PST on premium (Ontario, 8%) $1,824 (due at closing) The Rate Advantage: Is Insured Worth It? Here's where it gets interesting. Even though you're paying an insurance premium, the lower interest rate on an insured mortgage can offset—or even exceed—the premium cost over your term. 5-Year Comparison: Insured vs. Uninsured Uninsured (20% Down) Home price $600,000 $600,000 Down payment $30,000 $120,000 Mortgage $592,800 (with CMHC) $480,000 Rate 3.89% 4.14% Monthly payment $3,089 $2,567 Interest paid (5 years) $108,212 $93,447 CMHC premium cost $22,800 $0 The uninsured buyer pays $90,000 more in down payment to save roughly $37,565 in total costs over 5 years. That's a 42% return on the extra capital — but only if you don't have a better use for that $90,000. Key insight: If you can invest the difference between 5% and 20% down at a return higher than your mortgage rate, an insured mortgage may be the better financial decision. → Run your own numbers: Use our mortgage payment calculator Worried About Your Down Payment? You may be able to buy sooner than you think. Learn about low down payment options and first-time buyer programs. Explore Options Insured vs. Insurable vs. Uninsured Understanding these three categories is essential for comparing rates: Rate Level Insured Less than 20% Borrower (mandatory) Lowest Insurable 20% or more Lender bulk-insures (no cost to borrower) Middle Uninsured 20% or more No insurance Highest The difference between insurable and uninsured depends on whether the mortgage meets CMHC's criteria for the lender to purchase bulk insurance. Mortgages over $1M (or $1.5M for FTHB/new builds) and refinances are always uninsured. → Learn about uninsured options: Uninsured Mortgages in Canada How to Get the Best Insured Rate 1. Work with a Mortgage Broker A broker compares insured rates from 50+ lenders simultaneously. Banks only offer their own products. Best Rates clients save an average of $12,000+ over their mortgage term. 2. Improve Your Credit Score 760+ = best possible rates 720–759 = excellent rates 680–719 = good rates Below 680 = may face surcharges 3. Choose the Right Term 5-Year Fixed Rates — most popular, greatest stability 3-Year Fixed Rates — good balance of rate and flexibility Variable Rates — historically cheaper, follows Bank of Canada 4. Consider Accelerated Payments Accelerated bi-weekly payments can save $45,000+ in interest over 25 years without changing your rate. Common Questions About Insured Mortgages Can I remove CMHC insurance later? No. Once the premium is added to your mortgage, it stays for the life of that mortgage. However, at renewal you can switch lenders — your new mortgage may be classified as insurable if it meets the criteria. Does insurance transfer if I switch lenders? Yes. CMHC insurance is portable and stays with the mortgage when you renew with a different lender, as long as the mortgage balance doesn't increase. Can I get insured insurance on a rental property? No. Insured mortgages require owner-occupancy. Investment properties always require 20% minimum down payment. What if my home price is over $1.5 million? For first-time buyers and new construction, the CMHC limit is $1.5 million. For resale purchases by repeat buyers, the limit is $1 million. Above these thresholds, you need an uninsured mortgage with 20% down. Next Steps An insured mortgage isn't just a requirement for low-down-payment buyers — it's often the smartest financial choice because of the rate advantage. The key is working with a broker who can compare insured rates across dozens of lenders. → Get your best insured rate: Apply free at /apply/ — 50+ lenders competing for your mortgage, zero cost to you. → Calculate your payment: Mortgage Payment Calculator → Check how much you can afford: Affordability Calculator Ready to Make Your Move? Find out how much you can afford and what down payment you really need. Free, no-obligation consultation. Calculate Affordability Call (416) 822-7357 Frequently Asked Questions What Is an Insured Mortgage? An insured mortgage is a home loan that's backed by mortgage default insurance, provided by one of Canada's three authorized insurers: CMHC (Canada Mortgage and Housing Corporation) — government-owned Sagen (formerly Genworth) — private insurer Canada Guaranty — private insurer This insurance protects the lender (not you) if you default on your payments. Because the lender's risk is eliminated, they offer significantly lower interest rates on insured mortgages. When Is Insurance Mandatory? Mortgage default insurance is required by law when your down payment is less than 20% of the purchase price. But even though you're paying for the insurance, the lower rate often makes it worthwhile. Who Qualifies for an Insured Mortgage? To get an insured mortgage in Canada, you must meet these requirements: Owner-occupied: The property must be your primary residence Stress test: You must qualify at the higher of 5.25% or your contract rate + 2% GDS/TDS ratios: Maximum 39% GDS and 44% TDS Credit score: Minimum 600 (680+ for best rates) Property type: 1–4 unit residential (no commercial) The Rate Advantage: Is Insured Worth It? Here's where it gets interesting. Even though you're paying an insurance premium, the lower interest rate on an insured mortgage can offset—or even exceed—the premium cost over your term. The uninsured buyer pays $90,000 more in down payment to save roughly $37,565 in total costs over 5 years. That's a 42% return on the extra capital — but only if you don't have a better use for that $90,000. Can I remove CMHC insurance later? No. Once the premium is added to your mortgage, it stays for the life of that mortgage. However, at renewal you can switch lenders — your new mortgage may be classified as insurable if it meets the criteria. Does insurance transfer if I switch lenders? Yes. CMHC insurance is portable and stays with the mortgage when you renew with a different lender, as long as the mortgage balance doesn't increase. Can I get insured insurance on a rental property? No. Insured mortgages require owner-occupancy. Investment properties always require 20% minimum down payment. What if my home price is over $1.5 million? For first-time buyers and new construction, the CMHC limit is $1.5 million. For resale purchases by repeat buyers, the limit is $1 million. Above these thresholds, you need an uninsured mortgage with 20% down.
