When shopping for a mortgage in Canada, most people compare interest rates — but there’s a cost factor that often gets ignored: insured vs uninsured mortgages. One comes with lower rates but high insurance premiums, and the other comes with higher rates but no insurance costs.
So the big question is — which one actually saves you more over time? Let’s break it down clearly so you can run the numbers with confidence.
What Is an Insured Mortgage?
An insured mortgage is one where the homebuyer puts less than 20% down, and the mortgage is insured through CMHC, Sagen, or Canada Guaranty.
Pros
- Lower interest rates (because lenders take on less risk)
- Easier approval if your income or credit isn’t perfect
- Lower default risk — insurance protects the lender
Cons
- You pay a one-time insurance premium (which can add thousands to your mortgage)
- Insurance cost is usually rolled into your mortgage, meaning you pay interest on that too.
What Is an Uninsured Mortgage?
An uninsured mortgage is when you put 20% or more down, so no mortgage insurance is required.
Pros
- No CMHC or insurer fees
- More flexibility with alternative lending options (like equity-based financing through Cannect)
- Better for homeowners looking to leverage equity intelligently
Cons
- Interest rates are typically slightly higher.
- Lenders are stricter with approvals — especially big banks.
The Real Math: Which One Costs More?
| Insured Mortgage | 10% | 4.79% | ~$18,000 added to mortgage | Higher monthly savings, but long-term cost impact due to insurance interest |
| Uninsured Mortgage | 20% | 5.19% | $0 | Slightly higher monthly payment but no insurance drag over time |
Here’s the catch:
While insured mortgages offer a lower rate, the insurance premium can add the equivalent of 0.40% to 0.60% in blended cost over the life of the mortgage. That means your “low rate” may not be as low as it looks.
So… Which One Actually Saves You More?
- Short-term mindset? — Insured mortgages look cheaper and give lower payments.
- Long-term wealth building? — Uninsured mortgages often win, especially when paired with equity strategies like refinancing, investing, or leveraging home value.
Smart Homeowners Tip: If you’re close to 20% down, it may be worth waiting or using a home equity loan through Cannect to top up your down payment and skip insurance altogether.
Why Cannect Thinks Beyond Just Rates
At Cannect, we don’t just ask, “What’s your rate?”
We ask, “What’s your total cost over time… and where can your equity work harder for you?”
That’s the difference between a bank mortgage and an equity-optimized mortgage strategy.
Have You Run Your Numbers Yet?
Before you choose insured or uninsured, make sure you’ve calculated your true cost over time — including insurance, interest, and future refinancing options.
Want a clear breakdown with your actual numbers? Cannect can run a quick comparison for you — no obligation, just clarity.
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