Not every mortgage in Canada qualifies for default insurance — and that's not necessarily a problem. Uninsured mortgages are a critical part of the Canadian lending landscape, serving buyers with larger down payments, higher-value properties, and unique financing needs. But they do come at a cost: higher interest rates. Here's everything you need to know about uninsured mortgages, who needs one, and how to get the best rate possible. What Is an Uninsured Mortgage? An uninsured mortgage is a home loan that does not carry mortgage default insurance from CMHC, Sagen, or Canada Guaranty. This means the lender bears the full risk of borrower default. Because lenders take on more risk with uninsured mortgages, they charge higher interest rates — typically 0.10% to 0.30% more than comparable insured rates. Uninsured Down payment Less than 20% 20% or more Default insurance Yes (borrower pays) No Lender risk Zero (insurer covers) Full risk on lender Interest rate Lowest available Higher by 0.10%–0.30% Max amortization 25–30 years (eligibility dependent) Up to 30 years Max purchase price $1M–$1.5M (rule dependent) No limit When Do You Need an Uninsured Mortgage? You'll automatically have an uninsured mortgage in any of these situations: 1. Purchase Price Exceeds Insurance Limits Above Limit = Uninsured First-time buyer $1,500,000 $1,500,001+ New construction (any buyer) $1,500,000 $1,500,001+ Resale home (repeat buyer) $1,000,000 $1,000,001+ 2. Refinancing Your Mortgage Mortgage default insurance does not apply to refinances. If you're refinancing to access equity, consolidating debt, or restructuring your mortgage, it will be uninsured regardless of equity. 3. Rental or Investment Properties Investment properties require uninsured financing with a minimum 20% down payment. 4. Extended Amortization (Some Cases) While 30-year amortization is available for first-time buyers and new construction on insured mortgages, repeat buyers purchasing resale homes who want longer amortizations require uninsured financing through alternative lenders. 5. Non-Qualifying Properties Properties over 4 units Mixed-use with more than 49% commercial space Some rural properties without municipal services Current Uninsured Mortgage Rates Uninsured rates are typically the highest of the three service categories but remain historically competitive. → See today's uninsured rates: View current rate table → Get your personalized uninsured rate: Apply free — 50+ lenders, zero cost Uninsured vs. Insurable: The Hidden Middle Ground Many buyers with 20%+ down payment don't realize there are two categories their mortgage could fall into: Insurable Mortgages If your mortgage meets insurer criteria (price caps, owner-occupied, standard amortization), some lenders will bulk-insure your mortgage at their own expense. You receive a lower rate at no cost. When a 20%+ Down Mortgage Is Insurable vs. Uninsured Uninsured Purchase type Purchase only Purchase, refinance, equity takeout Max price (FTHB/new build) $1,500,000 No limit Max price (resale/repeat) $1,000,000 No limit Property Owner-occupied Any (including rental) Amortization 25 years max Up to 30–35 years Rate Lower (lender insures) Higher (lender carries risk) Key takeaway: If you're putting 20% down on a qualifying property, ask specifically for insurable rates. → Learn about insured options: Insured Mortgages in Canada The Cost of Uninsured: Real Numbers Scenario: $1.2M Home • 20% Down ($240K) • 25-Year Amortization 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 Compare Uninsured Rates from 50+ Lenders Uninsured rates vary significantly between lenders. We find the lowest one for you. View Current Rates Uninsured Rate Rate 3.94% 4.19% Mortgage $960,000 $960,000 Monthly payment $5,007 $5,128 5-year interest cost $179,212 $184,834 Extra cost over 5 years — $5,622 Over a full 25-year amortization, the difference grows to approximately $18,000–$25,000 in additional interest. → Run your own comparison: Mortgage Payment Calculator How to Get the Best Uninsured Rate 1. Maximize Your Down Payment Rate Impact 20% 80% Standard uninsured 25% 75% Slightly better pricing 35%+ 65% or less Best conventional rates 2. Choose the Right Lender Monoline lenders often offer better uninsured rates than major banks due to lower overhead. 3. Maintain Excellent Credit 760+: Best uninsured rates 720–759: Competitive rates 680–719: Standard rates Below 680: May require alternative lenders 4. Consider Term Strategy 5-Year Fixed — Most stability 3-Year Fixed — Often best value Variable — Lower penalties Uninsured Mortgage Penalties: What to Know One advantage of uninsured mortgages is that penalty calculations are often simpler. Variable Rate Penalty Insured (big bank) Greater of 3 months interest OR IRD 3 months interest Uninsured (monoline) Often 3 months interest only 3 months interest Self-Employed and Uninsured Mortgages If you're self-employed, uninsured mortgages offer more flexibility: Rate Premium A-lender uninsured 2 years T1 + NOAs 44% Standard uninsured B-lender uninsured 1 year T1 or bank statements 50% +0.5%–1.0% Private uninsured Stated income + equity 55%+ +2.0%–5.0% Common Questions About Uninsured Mortgages Can I switch from uninsured to insured at renewal? Not typically. An uninsured mortgage remains uninsured for its term. Are uninsured rates negotiable? Yes. There is more variation between lenders and more room for negotiation. Is 20% down always better? Not necessarily. An insured mortgage with 5%–15% down may be smarter depending on opportunity cost. What about jumbo mortgages over $1.5 million? These always require uninsured financing and strong qualification. Next Steps Whether you're buying high-value property, refinancing, or investing in real estate, uninsured mortgages are often part of the financing picture. → Get your best uninsured rate: Apply Now → Calculate your costs: Closing Costs Calculator → Compare all rate types: Current Rate Table Get Your Best Uninsured Rate — Free Access 50+ lenders specializing in conventional and jumbo mortgages. Zero cost. Zero obligation. Apply Now (2 min) 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 Uninsured Mortgage? An uninsured mortgage is a home loan that does not carry mortgage default insurance from CMHC, Sagen, or Canada Guaranty. This means the lender bears the full risk of borrower default. Because lenders take on more risk with uninsured mortgages, they charge higher interest rates — typically 0.10% to 0.30% more than comparable insured rates. When Do You Need an Uninsured Mortgage? You'll automatically have an uninsured mortgage in any of these situations: Mortgage default insurance does not apply to refinances. If you're refinancing to access equity, consolidating debt, or restructuring your mortgage, it will be uninsured regardless of equity. Investment properties require uninsured financing with a minimum 20% down payment. Can I switch from uninsured to insured at renewal? Not typically. An uninsured mortgage remains uninsured for its term. Are uninsured rates negotiable? Yes. There is more variation between lenders and more room for negotiation. Is 20% down always better? Not necessarily. An insured mortgage with 5%–15% down may be smarter depending on opportunity cost. What about jumbo mortgages over $1.5 million? These always require uninsured financing and strong qualification.
