When Canadians search for a mortgage, most people focus entirely on mortgage rates. While interest rates matter, they’re only part of the real cost. The bigger question is whether your mortgage is insured or uninsured, a choice that can impact your savings for decades.

Understanding the difference between these two mortgage types is essential for maximizing long-term financial flexibility and building equity strategically.

What Is an Insured Mortgage in Canada?

An insured mortgage applies when you make a down payment of less than 20% of your home’s purchase price. It’s protected by lenders through providers such as CMHC, Sagen, or Canada Guaranty.

Why it can be appealing:

• Lower interest rates due to reduced lender risk
• Easier approval with modest credit scores or limited income history
• Lower risk for lenders, creating more borrowing opportunities

However, insured mortgages require a one-time insurance premium, often tens of thousands of dollars, which is added to your mortgage balance. That means you’ll be paying interest on the insurance cost for the life of the loan, a hidden expense that can significantly increase your total repayment.

What Is an Uninsured Mortgage and Its Benefits?

An uninsured mortgage is for buyers who put 20% or more down. This eliminates the need for mortgage insurance and avoids the extra costs associated with it.

Why it’s attractive:

• No CMHC or insurer fees, saving thousands over the term
• Greater flexibility with alternative lenders, such as Cannect’s equity-based mortgage solutions
• Ideal for homeowners who want to maximize property equity for investments or refinancing

While interest rates are typically slightly higher, uninsured mortgages often win in the long run because you’re not paying for insurance premiums and interest on them.

Insured vs Uninsured Mortgage Rates: Long-Term Cost Comparison

Mortgage Type	Down Payment	Interest Rate	Insurance Cost	Effective Long-Term Cost
Insured Mortgage	10%	4.79%	~$18,000 added	Lower monthly payments now, but the total cost rises due to interest on insurance
Uninsured Mortgage	20%	5.19%	$0	Slightly higher monthly payments but avoids insurance cost drag

Over the life of the loan, insurance premiums can push the effective interest rate up by 0.40%–0.60%, erasing much of the advantage of the initial lower rate.

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Short-Term vs Long-Term Financial Strategies

Short-term affordability

Insured mortgages seem cheaper at first because of lower monthly payments.

Long-term wealth building

Uninsured mortgages often save more overall, especially if you use home equity strategies like refinancing, investing, or leveraging equity for other ventures.

Pro Tip: If your down payment is close to 20%, consider using a home equity loan from Cannect to reach the threshold and skip insurance costs entirely.

Why We Look Beyond Rates

At Cannect, we focus on total mortgage cost, not just the interest rate today. Our strategies include:

• Personalized mortgage comparisons
• Equity-optimized solutions
• Refinancing opportunities to cut long-term costs
• Investment-focused mortgage planning

By evaluating your full financial position, we help you choose a mortgage that works for both short-term affordability and long-term equity growth.

Make Your Mortgage Choice With Confidence

Deciding between an insured mortgage and an uninsured mortgage isn’t just about the rate; it’s about how much you’ll truly pay over time.

Cannect offers free, no-obligation mortgage comparisons so you can see exactly which option will maximize your savings.

Watch our Make Money Count videos and schedule your free consultation today.