Conventional mortgage
A mortgage with at least 20% down. No mortgage default insurance required. Pricing is typically higher than insured because the lender carries more of the credit risk.
With 20%+ down there's no insurance premium to pay, which saves thousands up front. The trade-off is rate: because the lender carries the full risk, conventional rates usually sit a touch above insured rates for the same borrower.
Conventional is the only path for purchases of $1.5 million or more, non-owner-occupied rentals, and (unless you're a first-time buyer or buying a new build) amortizations beyond 25 years. It's also how every refinance is done, because refinances can't be default-insured.
Ask your broker whether your file can be priced as 'insurable' instead: with 20%+ down, some lenders quietly insure it themselves to fund more cheaply and pass part of the saving to you, splitting the difference between conventional and insured rates.
Sources
- Guideline B-20: Residential Mortgage Underwriting Practices and Procedures (OSFI)
- How much you need for a down payment (Financial Consumer Agency of Canada)
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