What is the difference between an insured and uninsured mortgage?

Your mortgage is insured when you have less than 20% to put as a downpayment on your purchase. By law, lending institutions cannot lend more than 80% of the value of the home unless it is insured by CMHC (Canada Mortgage and Housing Corporation), Canada Guaranty or Genworth.

These insurers protect the lender against the default of a mortgage. The insurance is put in place, a premium is charged and this amount is added to your mortgage. A non-insured mortgage is when you have 20% or more to put as a downpayment. In most cases, there is no insurance premium charged. Occasionally, the lender may still need to have the mortgage insured through CMHC, Canada Guaranty or Genworth depending on the location of the property or type of property being purchased.