TL;DR
Use one scorecard for total cost, qualification resilience, and cash-to-close certainty before you lock rate or waive financing conditions.
What this product page solves
Most buyers compare only insured vs uninsured, then miss the insurable middle ground and default insurance mechanics that shape real cost. That creates avoidable surprises between offer acceptance and closing.
This page consolidates the product, FAQ, and checklist content into one decision framework so you can choose the path that still works under downside scenarios.
Definitions: insured vs insurable vs uninsured
- Insured mortgage: typically high-ratio financing where default insurance applies and the premium is usually added to mortgage balance.
- Insurable mortgage: usually low-ratio financing that can fit insurer-backed lender rules, but without borrower-paid default insurance premium in the same way high-ratio files are structured.
- Uninsured mortgage: low-ratio financing outside insurable criteria or lender insurance pathways, with pricing and qualification that may differ by lender and term.
Exact treatment varies by lender and insurer program. Always confirm assumptions in writing before commitment deadlines.
Decision table: which path tends to fit
| Decision factor | Insured | Insurable | Uninsured |
|---|---|---|---|
| Typical equity profile | Often lower down payment entry | Low-ratio with insurer-eligible structure | Low-ratio outside insurer-eligible structure |
| Borrower-paid default insurance premium | Usually yes | Usually no in the same high-ratio form | No |
| Rate positioning | Can be sharp in specific terms | Can be competitive depending on lender channel | May price higher or lower depending on risk and term |
| Qualification sensitivity | Program-rule dependent | Insurer-rule and lender-rule dependent | Lender policy and stress-test sensitivity |
| Common best-fit scenario | Preserve cash buffer and secure entry timing | Seek low-ratio flexibility with strong pricing potential | Prioritize structure control when insurable fit is weak |
Default insurance premium checklist before offer submission
- Confirm expected loan-to-value after down payment and incentives.
- Request written premium assumptions tied to your exact scenario.
- Verify whether provincial tax applies to the premium and when it is paid.
- Re-run affordability and debt-service with premium-adjusted balance.
- Confirm emergency reserves remain intact after all closing costs.
Rate versus total cost scorecard
| Scorecard dimension | Why it matters | How to check |
|---|---|---|
| Contract rate | Important but incomplete | Model 24 and 60 month outcomes, not monthly payment only |
| Insurance premium treatment | Can materially shift all-in cost | Validate if financed into balance and tax treatment at closing |
| Qualification resilience | Weak buffers increase closing risk | Stress-test debt-service under conservative assumptions |
| Liquidity after closing | Cash pressure drives post-close stress | Check reserves after legal, tax, and move-in costs |
| Fallback path | Protects execution certainty if first option weakens | Document one alternative path before waiving conditions |
Psychology traps that create expensive mortgage decisions
| Mental model | Common trap | Pragmatic correction |
|---|---|---|
| Anchoring bias | Fixating on one posted rate | Require a written three-path scorecard before lock |
| Present bias | Overweighting today’s payment and ignoring hold-period cost | Compare 24 and 60 month totals including premiums and taxes |
| Planning fallacy | Underestimating closing-cost and liquidity pressure | Add a reserve threshold and do not breach it for approval |
| Confirmation bias | Collecting only evidence for your preferred path | Write one steelman case for the alternative before choosing |
7-day decision plan
- Run insured, insurable, and uninsured payment scenarios with realistic term rates.
- Calculate all-in cost and liquidity impact over your expected hold period.
- Stress-test qualification and approval resilience before offer deadlines.
- Lock only after your fallback path and premium assumptions are documented.
Sources
- FCAC: How your down payment affects your mortgage
- FCAC: Mortgage loan insurance
- OSFI: Minimum qualifying rate for uninsured mortgages
- CMHC: Mortgage loan insurance for homebuyers and homeowners
- CMHC: Mortgage loan insurance cost and premium bands
- Government of Canada: mortgage reform backgrounder (published 2024-09-16)
- Government of Canada: reforms in force (published 2024-12-16)
- Sagen: Homebuyer 95 program overview
Best next step
- Run minimum down payment calculator.
- Run cash-to-close and affordability scenarios.
- Compare rate options after your three-path scorecard is complete.
- Start your pre-approval plan with one clean document package.
