Mortgage Blog

Insured v/s Uninsured Mortgages in Canada: A Guide for Calgary Home Buyers

February 19, 2026 | Posted by: Trintty Mortgage

Are you planning to buy a home in Calgary? If so, it is important to choose the right mortgage type. 

One of the most common challenges many home buyers face is choosing between Insured v/s Uninsured Mortgage in Canada. When hunting for a home in Calgary, it is important to understand the difference between these two mortgages, helping you save thousands of dollars over time.

What is an Insured Mortgage in Canada?

An insured mortgage is required when your down payment is less than 20% of the home’s purchase price. The mortgage in this case must be insured against default through a government-backed insurer. 

In Canada, the mortgage insurance is provided by –

• Canada Mortgage and Housing Corporation
• Sagen
• Canada Guaranty

The insurance protects the lender if the borrower fails to repay the loan. 

What are the key features of Insured Mortgages?

• It has lower interest rates
• Strict qualification rules
• Property price limit
• Mortgage insurance premium is required.

What is an Uninsured Mortgage in Canada?

An uninsured mortgage applies when –

• You put 20% or more down
• Your property value is more than $ 1 million or 
• Home refinancing.

What are the key features of Uninsured Mortgages?

• Minimum 20% down payment
• No Mortgage Insurance premium
• More flexibility in refinancing
• Slightly higher interest rate

Cost of Mortgage Insurance

The insurance premiums of Mortgage Insurance are calculated as a percentage of your loan amount and added to the mortgage. This increases the total loan amount; insured mortgages offer lower interest rates, which may offset the cost over time.

Insured Mortgages in Canada- Why are their rates lower?

The insured mortgages in Canada have lower rates, as the mortgage is insured, the lenders face less risk. This results in –

• Banks offering discounted interest rates
• Easy qualification
• Less monthly payments despite the premium 

If you are a first-time home buyer in Calgary’s competitive housing market, this can make homeownership more accessible. 

Insured Mortgage v/s Uninsured Mortgage – Key Differences Explained

• An insured mortgage in Canada is applicable when the down payment for your home is less than 20% of the purchase price. An uninsured mortgage applies when the home buyer puts down 20% or more, doing away with the need for mortgage default insurance.
• Insured mortgages are backed by approved mortgage insurers of Canada, such as CMC, Sagen or Canada Guaranty. These insurers protect the lender in case the borrower defaults. Uninsured mortgages do not require this protection.
• With an insured mortgage, the borrower pays a mortgage insurance premium calculated as a percentage of the loan amount. This cost is added to the mortgage balance. Whereas in the uninsured mortgages, there is no insurance premium involved, this reduces the total borrowed amount.
• Interest rates are generally lower for insured mortgages as the lenders face less financial risk due to insurance coverage. Uninsured mortgages may carry slightly higher rates since the lender assumes full risk.
• It is comparatively difficult to qualify for insured mortgages as the qualification criteria are often stricter. The property value limits and regulatory norms further make the process challenging. Uninsured mortgages may offer more flexibility in terms of property type and refinancing options. 
• Insured mortgages are common among first-time home buyers or individuals entering markets like Calgary, where the buyers may not yet have 20% saved but want to access competitive interest rates. Uninsured mortgages are preferred by buyers with strong financial positions, larger savings or those purchasing higher-value properties that exceed the insured mortgage price cap.
• If you are planning to refinance your home, uninsured mortgages offer more options, including extended amortization periods in some cases. Insured mortgages may have certain limitations once the initial term ends.
• In terms of total borrowing cost, insured mortgages may appear more affordable monthly due to lower interest rates, but the added insurance premium increases the long-term loan amount. There is no insurance premium in uninsured mortgages, but due to higher interest rates, they have higher monthly payments.
• If you are focusing on preserving your cash flow, an insured mortgage is your go-to option, helping you own a home with a smaller upfront investment. However, if you are aiming to minimize overall debt and insurance costs, uninsured financing is the best option to go for.
• If the borrower fails to make loan repayment, the risk is transferred to the insurer in insured mortgages. While in uninsured mortgages, the lender has to bear the entire risk. 
• If you aim for market entry and gain rate benefits, an insured mortgage is the best option. Whereas uninsured mortgages are better suited for those seeking flexibility, equity access and reduced total loan balance.
• Insured mortgages have a lower entry barrier and add insurance costs, while uninsured mortgages require higher initial capital but eliminate the need for mortgage default insurance. 

Both these mortgages must pass Canada’s mortgage stress test, ensuring the borrowers can handle payments if interest rates rise, maintaining stability in the housing market. The key difference between insured and uninsured mortgages lies in the balance between upfront savings and long-term cost. 

Choosing between an insured and uninsured mortgage is all about what fits your financial situation and plans better. The Calgary mortgage guide will help you make an informed choice.  Work with a professional mortgage Adviser who will help structure your financing most cost-effectively.

FAQs

1. Is Mortgage insurance compulsory in Canada?
Yes, if the down payment of a home buyer is less than 20%, an insured mortgage is mandatory in Canada. Work with Manpriit Pabla to help you make the right choice.

2. Does the mortgage insurance protect the buyer?
No, the insured mortgage in Canada protects the lender in case the buyer defaults on loan repayment.

3. Is it possible to switch from an insured to an uninsured mortgage later in Canada?
Yes, this switch is possible when refinancing or renewing your mortgage. Manpriit Pabla, the professional mortgage consultant, will help you make an informed choice.

About the Author

Manpriit Pabla is a dedicated mortgage consultant helping home buyers, investors, and homeowners make informed financing decisions. With in-depth knowledge of the mortgage ecosystem of Canada, Manpriit specializing in structuring competitive mortgage solutions.

He focuses on simplifying the mortgage process while securing the best possible rates and terms. Whether helping first-time buyers or experienced property investors, Manpriit Pabla aims to deliver strategic advice, long-term value and a seamless and hassle-free experience.

Back to Main Blog Page