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Check out today's best mortgage rates in Canada by type and term.
| Insured ? | 80% LTV ? The rates in this column apply to mortgage amounts between 65.01% and 80% of the property value. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | 65% LTV ? The rates in this column apply to mortgage amounts that are 65% of the property value or less. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | Uninsured ? | Bank Rate ? | ||
|---|---|---|---|---|---|---|
Insured 4.64% | 80% LTV 4.19% | 65% LTV 4.19% | Uninsured 4.99% | 4.99% | ||
Insured 3.99% | 80% LTV 3.89% | 65% LTV 3.89% | Uninsured 4.44% | 4.53% | ||
Insured 3.69% | 80% LTV 3.79% | 65% LTV 3.79% | Uninsured 3.9% | 4.39% | ||
Insured 3.84% | 80% LTV 3.99% | 65% LTV 3.99% | Uninsured 4.39% | 4.44% | ||
Insured 3.69% | 80% LTV 3.55% | 65% LTV 3.55% | Uninsured 3.69% | 4.19% | ||
Insured 4.19% | 80% LTV 4.24% | 65% LTV 4.24% | Uninsured 4.89% | 5% | ||
Insured 5.04% | 80% LTV 4.34% | 65% LTV 4.34% | Uninsured 5.24% | 6.09% | ||
Insured 3.9% | 80% LTV 3.95% | 65% LTV 3.9% | Uninsured 3.9% | 5.95% | ||
Insured 3.45% | 80% LTV 3.45% | 65% LTV 3.45% | Uninsured 3.5% | 4.24% | ||
Insured N/A | 80% LTV N/A | 65% LTV N/A | Uninsured N/A | N/A | ||
Insured 5.45% | 80% LTV 5.45% | 65% LTV 5.45% | Uninsured 5.5% | N/A |
In Canada, mortgages secured with a down payment of less than 20% of a home's selling price are classified as high-ratio. The minimum down payment on a property in Canada is 5%, but only if the selling price is below a certain threshold. Your down payment is a portion of the home's total value, so increasing your down payment lowers the gap between what you put down and what you owe. The gap is represented by a metric called the loan-to-value ratio (LTV). Conversely, by decreasing your down payment, you increase your LTV.
In Canada, borrowers wishing to purchase a home where they put down less than 20% must take out mortgage insurance that protects the lender from default. Canada's minimum required down payment is 5% for homes under $500,000. If you make a 5% down payment, you will have the maximum allowed LTV ratio of 95%.
When you’re in the process of obtaining a new mortgage, the most common amortization period offered to high-ratio borrowers is 25 years. Extended amortization periods of 30 years were traditionally rare for high-ratio borrowers, but since December 2024, first-time homebuyers and buyers of newly built homes can qualify for 30-year amortizations even on insured (high-ratio) mortgages.
A loan-to-value ratio (LTV) compares the price of the collateral (i.e. the house you want to purchase) with the value of the loan you request. It helps the lender know if you can secure financing, how much you can receive and what interest rate they should charge you. If your LTV is higher than 80%, then it is considered a high-ratio mortgage.
When applying for a mortgage, your lender will consider the mortgage's estimated LTV. The higher the LTV, the more scrutiny your application will face. For example, your mortgage lender will want to ensure you can still pay your other bills. High-ratio borrowers must show that expenses like mortgage payments, property taxes, heating costs, and condo fees will be at most 32% of their gross annual income. You can lower the LTV of your mortgage by increasing the size of your down payment or looking for a cheaper home to buy.
To qualify for a high-ratio mortgage, you must pay mortgage insurance, a type of insurance premium charged as a percentage of your borrowing amount. Only home purchases of $1 million or less are eligible for insurance.
High-ratio mortgages, by their very nature, pose extra risks for the lending institution. Because you are putting a less than 25% down payment on the purchase of a home, the insurance will protect the lender against mortgage default. At the same time, it allows you to enter the housing market and buy a home with as low as a 5% down payment.
The Canada Mortgage Housing Corporation (CMHC) is a Crown corporation, meaning it’s backed by the federal government. It is a leading provider of mortgage insurance, but not the only one. Homebuyers can purchase insurance from Sagen and Canada Guaranty.
Below are the main differences between high and low-ratio mortgages:
| Conventional (low-ratio) mortgage | High-ratio mortgage |
|---|---|
Requires a down payment of at least 20% of the home's value. | The loan amount is higher than 80% of the property's lending value, meaning the down payment is less than 20%. |
No purchase price restrictions. Putting 20% down frees you from the price-based limits that apply to smaller down payments. | A 5% down payment only works on homes under $500,000. For homes between $500,000 and $1,499,999, you need 5% down on the first $500,000 and 10% on the remainder. Homes over $1.5 million don't qualify. |
Mortgage insurance is not required. | Mortgage insurance is mandatory, and only available for homes priced at $1.5 million or less. The borrower, not the lender, pays the premium, either as a lump sum or added to monthly payments. |
Typically allows amortization periods of up to 30 years. | Generally capped at a 25-year amortization period, though first-time homebuyers and buyers of newly built homes can qualify for up to 30 years. |
Deciding which kind of mortgage you need is a challenging task. Because you are borrowing a considerable sum of money on your most valuable asset, you need to understand the pros and cons of each type of a high-ratio mortgage.
| The pros of a high-ratio mortgage | The cons of a high-ratio mortgage |
|---|---|
High-ratio mortgages allow people with little down payment savings to enter the housing market. People can use the required mortgage insurance to replace a larger down payment. | You are borrowing more money compared to a low-ratio mortgage. You will generally pay more in the long run, even with lower interest rates. |
A down payment as low as 5% of the purchase price can still get you an interest rate comparable to or even lower than people putting down 20%. | There is a limit on amortization periods for a high-ratio mortgage. With high-ratio mortgages, the amortization periods have a maximum of 25 years, compared to 35 years for a conventional mortgage. |
The lender also faces less risk as the loan is insured and protected from default. | There are also restrictions on how much you can spend on a home. Finding suitable digs for $1 million or less in a hot housing market can be difficult. |
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Yes. All homeowners in Canada with a high-ratio mortgage require mortgage insurance. It is commonly called CMHC insurance (since the Canadian Mortgage and Housing Corporation offers it), though other mortgage insurance providers are in the market. The rate you receive on your mortgage insurance will also depend on the loan-to-value ratio of your mortgage. The chart below indicates how much you’ll pay in mortgage insurance on a $500,000 home, depending on the size of your down payment.
| Home value | Down payment | Amortization period | Mortgage insurance |
|---|---|---|---|
| $500,000 | 5% or $25,000 | 25 years | $19,000 |
| $500,000 | 5% or $25,000 | 30 years* | $19,950 |
| $500,000 | 10% or $50,000 | 25 years | $13,950 |
| $500,000 | 10% or $50,000 | 30 years* | $14,850 |
| $500,000 | 15% or $75,000 | 25 years | $11,900 |
| $500,000 | 15% or $75,000 | 30 years* | $12,750 |
| $500,000 | 20% or $100,000 | 25 years | $0 |
| $500,000 | 20% or $100,000 | 30 years* | $0 |
*The 30-year amortization option is available only to first-time homebuyers and buyers of newly built homes; extending amortization beyond 25 years adds a 0.20% surcharge to the insurance premium.
Note: for homes priced above $500,000, the minimum down payment and insured-mortgage eligibility work differently. As of December 15, 2024, the price cap for insured (high-ratio) mortgages was raised from $1 million to $1.5 million, and the minimum down payment is 5% on the first $500,000 plus 10% on the portion between $500,000 and $1,499,999. Homes priced at $1.5 million or more still require a minimum 20% down payment and cannot be insured.
A high-ratio mortgage must have mortgage default insurance. Here are the requirements you must meet to get insurance.
The minimum down payment on a high-ratio mortgage is 5% of the home's value. Homes worth up to $500,000 require a down payment of at least 5%, while homes worth between $500,000 and $1,499,999 require a down payment of 5% on the first $500,000 and 10% of the rest. Homes worth $1,500,000 or more are not eligible for mortgage insurance. If you put down the minimum amount on a home, you automatically enter a high-ratio mortgage. For conventional mortgages, the minimum down payment in Canada is 20%.
While it’s true that high-ratio mortgages often come with slightly lower interest rates because they’re insured, this doesn’t mean it’s easy to find a great rate.
However, there are a number of factors lenders will take into account when considering your mortgage application, such as your credit score, your debt ratios, and your income. We recommend focusing on these factors to improve your chances of getting a great rate.
Yes. With the LowestRates.ca Mortgage Payment Calculator, you can see exactly how much you’ll be required to pay in mortgage payments depending on how much you put down. This calculation will also include mortgage insurance.
First, let’s review what a second mortgage and mortgage refinance are.
To refinance means replacing your current mortgage with a new one at different terms. Most of the time, it's not possible to refinance a high-ratio mortgage.
Second mortgages are loans that use your home as collateral. You can borrow up to 80% of its appraised value minus the balance on your first mortgage. Most lenders do not extend second mortgages or home equity lines of credit (HELOC) to high-ratio borrowers. To qualify for either product, you must own at least 20% equity in your home.
Five-year government bond yields typically drive high-ratio mortgage rates, so the differences between rates from one province to the next won't be significant. However, you might notice slight variations in rates because rates are set differently from one lender to another, and they may set rates based on how much competition they have. Lenders sometimes charge higher rates in markets they monopolize.
Joel Kranc
About the Author
Joel Kranc is an award-winning writer, author and journalist. Most of his experience lies within the institutional investment and financial services space. He also covers a variety of business topics for publications in North America and the UK.
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