Insured vs uninsured mortgage rates: why 20% down can mean a higher rate
An insured mortgage, with under 20% down, carries default insurance the borrower pays for, so lenders price it lower. On Nov 13, 2026 the lowest 5-year fixed we collected was 4.34% insured against 4.59% with 20% or more down. The Bank of Canada's averages show the same pattern every month.
Why are insured mortgage rates lower than uninsured rates?
With less than 20% down, federally regulated lenders must insure the mortgage against default with CMHC, Sagen or Canada Guaranty, and the borrower pays the premium. If the borrower defaults, the insurer pays the lender, and the insurance is backed by the federal government. Lower risk for the lender, and less capital it must hold against the loan, means a lower rate. Insured loans can also be pooled into Canada Mortgage Bonds, a cheap source of funding.
What's the difference between insured, insurable and uninsured?
- Insured (high-ratio): under 20% down; the borrower pays the premium. The price must be below $1,500,000 (since December 15, 2024).
- Insurable: 20% or more down, but the loan would still qualify for insurance (for example a purchase or switch within insurer limits). The lender may insure it in bulk at its own cost and offer a rate between the two. First National publishes this tier separately.
- Uninsured (conventional): loans that can't be insured, such as refinances, homes priced above the cap, or longer amortizations. Usually the highest rates.
Is a lower insured rate worth the premium?
| Minimum down payment | $35,0005% of $500,000 + 10% of the rest |
|---|---|
| Insured mortgage | $587,600includes the 4.00% CMHC premium |
| Insured rate | 4.34%ATB Financial, collected Nov 13, 2026 |
| 20% down mortgage | $480,000 |
| 20%+ down rate | 4.59%ATB Financial, collected Nov 13, 2026 |
| Monthly payment, insured | $3,200.15 |
| Monthly payment, 20% down | $2,680.74 |
| Interest over 5 years, insured | $118,924 |
| Interest over 5 years, 20% down | $102,892 |
| Premium added to the insured loan | $22,600paid back with interest over the amortization |
The insured buyer borrows more (the premium is added to the loan) at a lower rate; the 20% buyer borrows less and pays no premium but a higher rate. Which costs less overall depends on how long you keep the mortgage and on the rate gap at the time.
Open this example in the calculator →Computed Nov 13, 2026.
Do the Bank of Canada averages show the same gap?
Yes. In Aug 2026 the average rate on new insured 5-year-plus fixed mortgages was 4.12% and on new uninsured ones 4.58%, a 0.46-point gap; the gap between the lowest collected rates on Nov 13, 2026 was 0.25 points.
Which lenders price insured and uninsured mortgages differently?
Not all of them. 4 lenders in our dataset published separate 5-year fixed rates for insured and uninsured (or insurable) mortgages, and 3 published one rate for every down payment. Where a lender splits them, the insured rate is the lower one, because the mortgage insurer, not the lender, bears the risk of default.
| Lender | Insured (under 20% down) | 20% or more down | Difference |
|---|---|---|---|
| ATB Financial | 4.34% | 4.59% | 0.25 pts |
| Servus Credit Union | 4.59% | 4.64% | 0.05 pts |
| Lakeland Credit Union | 4.39% | 4.64% | 0.25 pts |
| Vancity | 4.79% | 4.84% | 0.05 pts |
What is that gap worth? On a $400,000 mortgage over 25 years, here is the extra interest over a 5-year term at each lender's 20%-down rate compared with its own insured rate:
| Lender | Monthly payment difference | Interest difference over 5 years |
|---|---|---|
| ATB Financial | $55.50 | $4,788 |
| Servus Credit Union | $11.18 | $959 |
| Lakeland Credit Union | $55.63 | $4,790 |
| Vancity | $11.29 | $960 |
Set that against the insurance premium, which is added to the mortgage once (4.00% of the loan at 5% down on a 25-year amortization), and the reason buyers with under 20% down still pay more overall becomes clear: the lower rate rarely recovers the premium within one term. With 20% or more down there's no premium, so the choice is simply the lowest uninsured rate.
If your lender quotes one rate for everyone, check whether a lender that splits the two would give you its insured rate: with under 20% down you're paying for mortgage insurance anyway, so you should get the price that goes with it.
How should you compare rate quotes?
Our rate board splits every term into insured (under 20% down) and 20%+ down columns, and marks rows where a lender's page doesn't split them. If you're renewing an insured mortgage, lenders typically price it as insured because it stays insured for its life.
What this means for you
- Saving for a down payment: reaching exactly 20% doesn't always pay; you lose the insured rate. Run both cases in the cost calculator.
- Getting a quote: ask which tier the rate is for (insured, insurable or uninsured) and whether a 30-year amortization changes it.
- Refinancing: expect uninsured pricing, because refinances can't be insured.
Frequently asked questions
Why is my rate higher with 20% down?
With 20% or more down your mortgage usually isn't insured, so the lender carries the default risk and prices it higher. Insurable loans can sit in between.
Do I keep the insured rate when I renew?
An insured mortgage stays insured for its life, so lenders typically price its renewal as insured.
Primary sources
- Department of Finance Canada — Mortgage reforms in force: $1.5M insured cap, 30-year amortizations (effective December 15, 2024). Checked .
- Bank of Canada — Effective rate on new insured fixed mortgages, 5 years and over (series V122667780) (effective August 1, 2026). Checked .
- Bank of Canada — Effective rate on new uninsured fixed mortgages, 5 years and over (series V122667786) (effective August 1, 2026). Checked .