Insured, Insurable or Uninsured Mortgages

What is the difference? How does it affect your mortgage?

When purchasing a property, there are specific requirements around mortgage insurance.

You will pay CMHC, Sagen or Canada Guaranty insurance for an insured mortgage, while the lack of insurance in an uninsured mortgage means you won’t have to pay additional premiums.

An insurable mortgage is a mortgage that can be insured but may not be currently insured. An insurable mortgage can either be insured or uninsured (depending on your down payment–but more on that later.) The borrower isn’t always required to pay the premiums. The lender can choose to get the mortgage insured and pay the mortgage default insurance premiums themselves.

An uninsurable mortgage is a mortgage that cannot be insured, whether the borrower or lender wants to have it insured.

What is an insured mortgage?

Here are some important points to consider with an insured mortgage:

• Insured mortgages are available for purchases of owner-occupied properties under $1M with 25-year amortizations.
• With an insured mortgage, the minimum down payment is 5% and cannot be 20% or higher. Any down payment between 5-19.99% automatically means an insured mortgage. 
• The applicant commonly pays for the premium via an equity stake on the property.
• The lower your down payment, the higher your premium. 
• The insurance premium goes down in 5% increments at 10% down, 15% down, 20% down, then no premium.

What is an insurable mortgage?

Here are some important points to consider with an insurable mortgage:

• The minimum down payment for an insurable mortgage is 20% down. 
• These are available for purchases under $1M and mortgage renewal transfers with 25-year maximum amortization.

What is an uninsurable mortgage?

Here are some important points to consider with an uninsurable mortgage:

• The minimum down payment for an uninsured mortgage is 20% down.
• Can do up to a 30-year amortization.
• Some lenders will have more flexibility with this type of mortgage.

Insured mortgages will have the lowest fixed rates, with insurable mortgages following suit with a slightly higher fixed rate. Uninsured mortgages will have the highest fixed rate of the three.

Your next step is to reach out. 

If you’re ready to know what kind of mortgage and rates you qualify for, please get in touch with me at 250-320-4110. You can also fill out the contact form or complete a pre-approval on my website. I will reach out to you shortly.
I look forward to helping you in your home buying journey.