Rates & comparisons
Insured vs Insurable vs Uninsured: Why Less Than 20% Down Gets You a Lower Rate
The lowest mortgage rates in Canada go to buyers with the smallest down payments. That sounds backwards until you see who carries the risk. Here are the three tiers, the rules that put you in each, and why chasing the lower rate rarely pays.
Reviewed November 13, 2026 · Indicative figures, OAC
Three tiers, one 5-year fixed
Lenders price the same 5-year fixed mortgage in three tiers depending on whether the loan carries mortgage default insurance and who paid for it. This week's broker benchmarks:
- Insured (under 20% down)
- 4.29%
- Insurable (20%+ down, purchase or switch)
- 4.39%
- Uninsured (refinance, over $1.5M, rentals)
- 4.54%
- Insured price cap
- $1.5M
| Rate tier | 3-yr fixed | 5-yr fixed | 5-yr variable |
|---|---|---|---|
| High-ratio insuredUnder 20% down, CMHC / Sagen / Canada Guaranty | 4.39% | 4.29% | 3.65% |
| Insurable20%+ down, purchase or switch, up to $1.5M | 4.49% | 4.39% | 3.75% |
| Uninsured (conventional)Refinances, $1.5M+, most rentals | 4.64% | 4.54% | 3.95% |
| Ontario credit-union tierProvincially regulated lenders | 4.74% | 4.69% | 4.10% |
| Alternative "B" lender1–2 year terms typical, fees disclosed | 5.49%–6.99% | — | Prime + 0.50–2.00 |
| Private / MIC1-year, interest-only, fees disclosed | 8.99%–12.99% | — | — |
Indicative benchmark rates for qualified borrowers, OAC. Rates change daily and depend on credit, property, amortization and loan size. Big-6 posted 5-year fixed for penalty math: 6.09%. Not a commitment to lend.
Rates are indicative for the week of November 13, 2026, on approved credit, and change daily.
Why the smallest down payment gets the best rate
With less than 20% down, federal rules require default insurance from CMHC, Sagen or Canada Guaranty. You pay the premium, and in return the insurer, backed ultimately by the federal government in CMHC's case, covers the lender if you default. An insured mortgage is close to risk-free for the lender: it needs to hold very little capital against it and can fund it cheaply through government-backed mortgage securities. So it gets the lowest rate.
An insurable mortgage meets every insurance rule except that you put 20% or more down. The lender can choose to buy portfolio insurance on it at its own expense (the low-ratio premium tiers run 0.60% up to 65% loan-to-value, 1.70% to 75% and 2.40% to 80%) and fund it the same way. That cost is built into a rate slightly above the insured tier.
An uninsured mortgage cannot be insured at all, because it is a refinance, the price is $1.5 million or more, it is a rental, or the amortization is beyond the insurable limit. The lender carries the full risk and holds more capital, so the rate is highest.
Which tier are you in?
| Rule | Insured | Insurable | Uninsured |
|---|---|---|---|
| Down payment / equity | Under 20% (minimum 5% of the first $500,000, 10% of the rest) | 20% or more | 20% or more |
| Purchase price | Under $1.5M | Under $1.5M | Any, including $1.5M+ |
| Transaction | Purchase or switch | Purchase or straight switch | Refinance, equity takeout, most rentals |
| Amortization | 25 years; 30 for first-time buyers and new builds | Within insurable limits (25, or 30 where eligible) | Up to 30 with most lenders |
| Premium paid by you | 2.80%–4.00% of the loan (+0.20% on 30-year) | $0 | $0 |
| 8% Ontario PST on premium, cash at closing | Yes | No | No |
| 5-yr fixed this week | 4.29% | 4.39% | 4.54% |
One exception worth knowing: since January 15, 2025, an insured refinance is available to add a secondary suite, up to 90% of the as-improved value on properties up to $2 million and up to 4 units, with amortization up to 30 years. See duplex and secondary suite mortgages.
Should you put less down to get the lower rate?
Worked example: $565,000 in Niagara Falls
A Chippawa buyer at Niagara Falls' benchmark price of $565,000 compares four ways to finance it over 25 years. Minimum down is $25,000 + 10% × $65,000 = $31,500 (5.58%). Payments use semi-annual compounding; balances are after the 5-year term.
| Item | 10% down, insured 4.29% | 19% down, insured 4.29% | 20% down, insurable 4.39% | 20% down, uninsured 4.54% |
|---|---|---|---|---|
| Down payment | $56,500 | $107,350 | $113,000 | $113,000 |
| Base loan | $508,500 | $457,650 | $452,000 | $452,000 |
| Insurance premium (added to loan) | $15,763.50 (3.10%) | $12,814.20 (2.80%) | $0 | $0 |
| 8% PST, cash at closing | $1,261.08 | $1,025.14 | $0 | $0 |
| Total mortgage | $524,263.50 | $470,464.20 | $452,000 | $452,000 |
| Monthly payment | $2,840.77 | $2,549.25 | $2,474.13 | $2,511.76 |
| Interest over 5 years | $104,852 | $94,092 | $92,561 | $95,808 |
| Balance after 5 years | $458,670 | $411,601 | $396,114 | $397,102 |
Compare the middle two columns. Putting 19% down instead of 20% keeps $5,650 in the bank and earns a rate 0.10% lower, but it costs a $12,814.20 premium plus $1,025.14 PST, raises the payment by $75.12 a month, and leaves $15,487 more owing after five years. The lower rate never catches up with the premium.
The last column shows the tier gap on its own: the same $452,000 as an uninsured loan costs $37.63 a month and $3,247 more in interest over five years than as an insurable one.
How to land in the best tier you can
- Buying with 20%+ down? Make sure the file is underwritten as insurable: purchase price under $1.5M, owner-occupied, amortization within insurable limits. Choosing a 30-year amortization on a conventional loan can push some lenders to price it as uninsured; ask before you choose.
- Renewing? A straight switch (same balance, same remaining amortization) usually keeps an originally insured mortgage at insured pricing and an insurable one at insurable pricing, with no stress test. See our renewal guide.
- Refinancing? Adding money makes the loan uninsured (except the secondary-suite program). Weigh whether a HELOC or a second mortgage behind a low insured rate is cheaper; see HELOCs and home equity loans and refinancing.
- Close to a premium tier boundary? The premium drops from 4.00% to 3.10% at 10% down and to 2.80% at 15%. Crossing a boundary can be worth more than the extra cash. Run it in the payment and closing cost calculator.
Frequently asked questions
Why do insured mortgages have lower rates than mortgages with 20% down?
Because the default insurer, not the lender, carries the risk of loss on an insured mortgage, and the lender can fund it cheaply through government-backed securities. This week that puts the insured 5-year fixed at 4.29% against 4.39% for insurable and 4.54% for uninsured. You pay for that through the insurance premium.
What does insurable mean?
An insurable mortgage meets all default-insurance rules (purchase or straight switch, price under $1.5M, amortization within insurable limits) but has 20% or more down. The lender may insure it in bulk at its own cost, so it prices just above the insured tier, and you pay no premium.
Is it worth putting less than 20% down to get the insured rate?
Rarely. On a $565,000 Niagara Falls purchase, 19% down at 4.29% instead of 20% down at 4.39% costs a $12,814.20 premium plus $1,025.14 PST, raises the payment by $75.12 a month and leaves $15,487 more owing after five years.
Can the CMHC premium and PST be added to the mortgage?
The premium is added to the mortgage. In Ontario, the 8% provincial sales tax on the premium cannot be financed and is paid in cash on closing through your lawyer. On a $15,763.50 premium that is $1,261.08.
Why is a refinance always in the uninsured tier?
Federal rules do not allow default insurance on refinances, with one exception since January 15, 2025: an insured refinance to add a secondary suite, up to 90% of the as-improved value. Other refinances are capped at 80% loan-to-value and priced as uninsured, 4.54% for a 5-year fixed this week.
Pre-approval & rate review
Get your Niagara mortgage numbers checked
Tell us where you are buying or what you owe. We reply by email, usually within one business day, with options from across the lender tiers.
- A licensed advisor reviews your numbers against A-lenders, Ontario credit unions and alternative lenders.
- Rate holds of up to 120 days on purchases and renewals (lender-dependent).
- On prime files the lender pays the brokerage, so there is no fee to you; any fee on alternative or private files is disclosed in writing first.
- Nothing goes to a lender or credit bureau until you say so.
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