WHAT IS AN UNINSURABLE MORTGAGE?

Mortgage rules in Canada have created three lending tiers — insured, insurable, and uninsurable — each with its own rate structure, restrictions, and costs. Understanding which category YOU fall into can dramatically affect the interest rate you receive and what options are available to you.

See why falling into the “uninsurable” category can increase your rate and limit your flexibility 👇 

Canada’s mortgage system separates loans into three pricing categories:

1️⃣ Insured Mortgages 

These mortgages are backed by CMHC, Sagen, or Canada Guaranty and require default insurance premiums. 

✔️ Less than 20% down 

✔️ Highest safety for lenders 

✔️ Lowest rates on the market 

✔️ Can be securitized and sold as Mortgage-Backed Securities (MBS)

2️⃣ Insurable Mortgages 

These have 20%+ down and do not require the borrower to pay insurance premiums — but the loan still meets insurer guidelines. 

✔️ Property must meet insurer rules 

✔️ Amortization max 25 years 

✔️ No refinances 

Rates are usually just slightly higher than fully insured mortgages.

3️⃣ Uninsurable Mortgages 

These do NOT meet insurer guidelines and cannot be covered by CMHC or other insurers. 

This includes: 

• refinances 

• amortizations over 25 years 

• rental properties in certain categories 

• homes over the insurer price limits 

• stated-income or non-traditional applications 

✔️ No insurance premium 

✔️ BUT lender must carry 100% of the risk 

➡️ Result: higher interest rates (typically 10–20 bps more)

Because uninsurable mortgages cannot be packaged as MBS and sold to investors, lenders must use their own balance-sheet funds — making them more expensive to offer.

Why This Matters For You

Insured and insurable loans are cheaper for lenders, so they pass those savings to you. 

Uninsurable loans cost lenders more, so you pay more.

That means homeowners wanting to: 

• refinance 

• extend to a 30-year amortization 

• consolidate debt 

• access equity for renovations or investments 

…will almost always see higher rates than buyers with insured/insurable files.

Are the rules changing soon?

There are ongoing rumours that the federal government may once again allow: 

✔️ refinances to be insured 

✔️ 30-year amortizations to be insured 

But so far — no official changes are expected in the near term.

💬 Final Thought

If you plan to refinance, extend amortization, or pull equity from your home, you may fall into the uninsurable category — and that affects your rate. Before making a move, get a full mortgage analysis so you understand all costs and alternatives.

Send The Frontline Mortgage Group your current mortgage details anytime for a free breakdown and strategy review.