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The Difference Between an Insured, Insurable, and Uninsurable Mortgage

The Difference Between an Insured, Insurable, and Uninsurable Mortgage

When it comes to mortgages, you’ll often hear the terms insured, insurable, and uninsurable. These categories matter because they affect what kind of rates and products you’ll have access to.

Insured Mortgages

If you’re putting down less than 20%, your mortgage must be backed by default insurance through CMHC, Sagen, or Canada Guaranty. This isn’t optional—it’s required by federal regulations for any federally regulated lender.

The insurance protects the lender, not you, but the upside is that it allows you to buy a home with as little as 5% down. The premium is added to your mortgage amount and varies depending on your down payment size (e.g., 4% with 5% down, 3.1% with 10% down, 2.8% with 15% down).

Because insured mortgages carry the least risk for lenders, they typically come with the lowest interest rates.

[Click here to start a pre-approval with as little as 5% down]

Insurable Mortgages

An insurable mortgage is one where the loan-to-value ratio is 80% or less (meaning you have at least 20% down), but the property and borrower still meet insurer guidelines.

For example, if you buy a home with 20% down, your lender can choose to insure the mortgage on the back end (at their cost) even though you didn’t need default insurance yourself. Since the loan still qualifies for insurance, it often comes with better rates than uninsurable mortgages.

Uninsurable Mortgages

Uninsurable mortgages don’t qualify for default insurance, either because:

  • The loan-to-value is over 80% but doesn’t meet insurer rules (e.g., property value over $1.5M, 30-year amortization, rental properties in some cases).

  • The mortgage is a refinance.

  • The borrower doesn’t fit insurer guidelines for credit or income.

Since these carry more risk for the lender, the rates are usually higher.

Bottom Line

Whether your mortgage is insured, insurable, or uninsurable affects what kind of products and rates you’ll be offered. If you’re not sure where you fit, it’s worth talking it through with a broker who can map out the options for your situation.

Call/text (902) 402-9779, or email greg.matthews@mortgagegroup.com to find out which is best for you!