If your down payment is under 20%, your mortgage is usually “insured.” That insurance protects the lender—not you—but it lets you buy with a smaller down payment and often unlocks better pricing than you’d get otherwise. Here’s how mortgage insurance works in Canada and what Port Moody buyers should watch for.
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Who are the insurers?
Canada has three mortgage insurers: the federal CMHC (Crown corporation) and two private insurers, Sagen and Canada Guaranty. Your lender chooses the provider; you don’t apply to them directly. (Canada Mortgage and Housing Corporation)
When do you need mortgage insurance?
- Down payment < 20% on an owner-occupied home (most common).
- With the 2024 reforms, insured mortgages can cover home prices up to $1.5M (previous cap $1.0M), which widens eligibility for high-ratio buyers in markets like Port Moody. (Canada.ca)
Insured loans are also tied to maximum amortization rules (see next section).
Maximum amortization (insured)
If your down payment is under 20%, the maximum amortization is:
- 30 years if you’re a first-time buyer and/or you’re buying a new build (effective Dec 15, 2024).
- 25 years in all other insured cases. (Canada.ca)
What does the insurance cost?
The insurer charges a one-time premium based on your loan-to-value (LTV)—the smaller your down payment, the higher the premium rate. You can add this premium to your mortgage instead of paying it in cash at closing. (Canada Mortgage and Housing Corporation)
Why insured files sometimes get lower rates
Because the lender’s risk is covered by insurance, many lenders offer sharper pricing on insured files than on uninsured ones—despite the premium. The trade-off is the premium itself and the rules (like amortization caps) that insured loans must follow. (Canada Mortgage and Housing Corporation)
Insured vs. Insurable vs. Uninsured (quick lens)
- Insured: Usually <20% down; subject to insured rules (amortization limits, price cap).
- Insurable: ≥20% down and meets insurer criteria (even if not individually insured); often near-insured pricing.
- Uninsured: ≥20% down or properties/programs outside insurer rules; typically higher rates but more product flexibility.
Your file, property type, and price point determine the bucket—and that bucket influences both rate and features.
What Port Moody buyers should watch
- Strata health matters: Depreciation report, reserve fund (CRF), and insurance details can influence a lender’s comfort—especially for insured condos in Suter Brook, Newport Village, or Moody Centre.
- Price bands: With the insured cap at $1.5M, many local townhomes/houses may re-enter high-ratio eligibility, changing your down-payment strategy. We’ll model insured vs. uninsured total cost. (Canada.ca)
- Amortization fit: First-time buyers and new-build purchases might use 30-year insured amortizations to smooth cash flow; others are capped at 25 years when insured. (Canada.ca)
FAQs
Does mortgage insurance protect me?
No—it protects the lender. But it helps you qualify with a smaller down payment and can improve the rate offered. (Canada Mortgage and Housing Corporation)
Who pays the premium and when?
You do. It’s a one-time charge that your lender adds to the mortgage by default (you can choose to pay it upfront). (Canada Mortgage and Housing Corporation)
Can I choose the insurer?
Usually the lender chooses based on relationships and policies; all three (CMHC, Sagen, Canada Guaranty) operate nationally. (Canada Mortgage and Housing Corporation)
What about debt-service and documentation rules?
Those vary by insurer and lender. We’ll package your income/credit story to fit current guidelines and get a fast approval.
Do investment properties qualify for insured pricing?
Insured programs focus on owner-occupied homes; scenarios outside those rules are typically uninsured (or priced differently). Ask us about today’s options for rentals.
What to do next
- Map insured vs. uninsured total cost (premium + rate + features).
- Check price and amortization eligibility under the $1.5M cap and 30-year rules (if applicable). (Canada.ca)
- Lock a rate (often up to 120 days) while we assemble a clean, lender-ready file.
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