Mortgage rates are not created equal and either are buyers and homeowners. There’s a lot that goes into the difference between mortgage rates and what you are eligible for. Banks and rate sites offer the rock bottom rates like loss leaders to just get you to contact them. Once they determine your situation they will tell you that can either get that rock bottom rate or you don’t qualify and not necessarily because you have bad credit or not enough income, your property value and equity matters more.

Let’s start with a bit of a breakdown.

🛡️ Insured Mortgages (Commonly known as High Ratio)

• Typically used by first-time buyers
• Down payment: Less than 20%
• Mortgage insurance: Required (CMHC, Sagen, or Canada Guaranty)
• Who pays the insurance? The buyer (added to the mortgage amount)
• Home price limit: Up to $1.5 million (with minimum down payment rules)
• Amortization can be up to 30 years for First Time Buyers only
• Interest rates: Usually the lowest available
• Available to purchasers whether first time home buyer repeat buyers
• Why? Lenders are protected by the insurer in the event you default on payment, so they offer better rates as you are lower risk.

Good to know:
Even though you pay for the insurance, you benefit from lower rates and easier qualification.

🏠 Insurable Mortgages

• The “best of both worlds” option
• Down payment: 20% or more
• Mortgage insurance: Not paid by the buyer, but the mortgage meets insurance guidelines
• Home price limit: Typically under $1 million
• Amortization: Up to 25 years maximum
• Interest rates: Very competitive — often close to insured rates
• Available to purchasers and those with mortgages up for renewal that do not want to make any changes and just move lenders for better rates. Property value must be under $1M.
• Why? The mortgage can be insured by the lender if they choose, reducing their risk

Good to know:
Many buyers don’t realize this option exists — it can mean better pricing without paying insurance.  When you have more than 35% down payment or equity, you get rock bottom rates and do not have to pay the insurance but receive the same benefits.

💼 Conventional Mortgages (Commonly known as Uninsured)

• More flexibility, fewer restrictions
• Down payment: 20% or more
• Mortgage insurance: Not required
• Home price: No maximum
• Amortization: Can be 30 years
• Interest rates: Usually slightly higher
• Available to all purchasers with more than 20% down payment, refinance clients or mortgage renewals when property value is over $1M
• Why? The lender takes on more risk as it’s not insured on the back end, so pricing reflects that

Good to know:
This option is common for higher-value homes, rental properties, or buyers wanting longer amortizations, refinances and debt consolidations.

✨ Quick Comparison

• Lower than 20% down? → Insured
• 20%+ down & under $1M? → Possibly Insurable
• 20%+ down & more flexibility needed? → Conventional

So in summary, don’t get caught up in the rates you see advertised as mortgages are not a one size fits all and not all mortgage rates are offered equally.  When in doubt reach out and we an quickly tell you what bucket you fall into.  Click here to  BOOK A CALL we’d love to help you!