High-Ratio vs Conventional Mortgage in Canada: Complete Guide (2026)

High-Ratio vs Conventional: The Core Difference

In Canadian mortgage terminology, all mortgages fall into one of two categories:

High-ratio mortgage: Down payment is less than 20% of the purchase price (LTV > 80%). CMHC mortgage default insurance is mandatory. Available on owner-occupied properties under $1,500,000 with up to 25-year amortization (30-year for eligible first-time buyers on properties under $1M).

Conventional mortgage: Down payment is 20% or more (LTV ≤ 80%). No mandatory mortgage insurance. Available on owner-occupied and investment properties. Maximum amortization 30 years (25 years was the historical limit; the 30-year conventional amortization was restored in 2024).

Down Payment Thresholds (2026)

Minimum down payments for owner-occupied properties in Canada:

Purchase Price	Minimum Down Payment	Mortgage Type	Insurance Required
Under $500,000	5%	High-ratio	Yes (CMHC/Sagen/CG)
$500,000-$999,999	5% on first $500K + 10% on remainder	High-ratio	Yes
$1,000,000-$1,499,999	20%	Conventional	No
$1,500,000+	20%+	Conventional	No (not available)
Investment/rental property	20%	Conventional	No (not available)

CMHC Insurance Premiums

High-ratio mortgages require CMHC (or Sagen/Canada Guaranty) default insurance. The premium is added to the mortgage amount:

LTV 80.01-85%: 2.80% of mortgage amount
LTV 85.01-90%: 3.10% of mortgage amount
LTV 90.01-95%: 4.00% of mortgage amount
30-year amortization surcharge: +0.20%

Example: $600,000 purchase, 5% down ($30,000 down, $570,000 mortgage, 95% LTV)

CMHC premium: 4.00% × $570,000 = $22,800
Premium added to mortgage: $570,000 + $22,800 = $592,800 total mortgage

This premium is the cost of accessing the property market with less than 20% down.

Which Is Actually Cheaper: High-Ratio or Conventional?

Counter-intuitively, high-ratio mortgages often have lower interest rates than conventional because lenders face no credit risk (CMHC guarantees them). The rate difference is typically 0.05-0.20% lower for insured products.

Comparing a $600,000 purchase at 5% down vs 20% down:

	5% Down (High-Ratio)	20% Down (Conventional)
Down payment	$30,000	$120,000
Mortgage before insurance	$570,000	$480,000
CMHC premium (4.00%)	$22,800	$0
Total mortgage	$592,800	$480,000
Interest rate (5yr fixed)	4.99% (insured)	5.14% (conventional)
Monthly payment (25yr)	$3,442	$2,822
Savings going conventional	-	+$620/month BUT $90K more down

30-Year Amortization: Who Qualifies?

Canada extended 30-year amortization to certain borrowers in 2024:

High-ratio (insured) 30-year amortization: requires ALL of:

First-time home buyer (or never owned a home in the last 4 years)
New construction purchase (newly built property)
Property price under $1,000,000
5-19.99% down payment

Conventional 30-year amortization:

Available to all borrowers with 20%+ down
No first-time buyer requirement
No new construction requirement
All property price ranges

The 30-year amortization reduces monthly payments approximately 10-12% compared to a 25-year amortization, at the cost of significantly more total interest paid.

Example: $550,000 mortgage at 5.0%
25-year amortization: $3,197/month, total interest: $409,100
30-year amortization: $2,922/month, total interest: $501,920

Savings: $275/month in payments
Cost: $92,820 more in interest over 30 years

Amortization Limits by Mortgage Type

Maximum amortization varies by mortgage type and borrower profile:

Mortgage Type	Max Amortization	Conditions
High-ratio (CMHC standard)	25 years	Standard owner-occupied purchase
High-ratio (30-yr program)	30 years	First-time buyer + new construction + under $1M
Conventional (owner-occupied)	30 years	20%+ down, no other restrictions
Investment property	30 years	20%+ down, conventional only
B lender products	25-35 years	Varies by lender

Matching Scenarios with bips

The right mortgage structure (high-ratio vs conventional, 25-year vs 30-year amortization) affects both qualification and long-term cost. bips calculates GDS/TDS under both amortization scenarios and shows which lenders qualify the deal at each structure, letting you present the client with a clear comparison.

Frequently asked questions

What is a high-ratio mortgage in Canada?

A high-ratio mortgage in Canada has a down payment of less than 20% (LTV above 80%). CMHC mortgage default insurance is mandatory. Maximum purchase price is $1,499,999. Maximum amortization is 25 years (30 years for first-time buyers purchasing new construction under $1M). High-ratio mortgages often have slightly lower interest rates because CMHC insurance removes lender risk.

What is a conventional mortgage in Canada?

A conventional mortgage in Canada requires a minimum 20% down payment (80% or less LTV). No mortgage default insurance is required. Available on all property types including investment/rental properties. Maximum amortization is 30 years. Rates are typically 0.05-0.20% higher than insured (high-ratio) products due to the absence of CMHC backing.

Is it better to put 20% down or less in Canada?

It depends. With less than 20% down, you pay a CMHC premium (2.80-4.00% of the mortgage) but often get a lower rate. With 20%+ down, you avoid the premium but pay slightly more in rate. For most buyers who don't have 20% readily available, the high-ratio route makes sense: the rate savings partially offset the premium cost. For buyers with the capital, conventional gives more flexibility (30-year amortization, investment properties).

Can you get a 30-year amortization in Canada?

Yes, in two ways: (1) Conventional mortgages (20%+ down) always allow 30-year amortization; (2) High-ratio (insured) 30-year amortization is available for first-time buyers purchasing new construction under $1,000,000. CMHC charges a +0.20% premium surcharge for amortizations over 25 years on insured mortgages.

What is the maximum purchase price for a high-ratio mortgage in Canada?

As of December 2024, the maximum purchase price for a CMHC-insured (high-ratio) mortgage is $1,499,999. Properties at $1,500,000 or above require a minimum 20% down payment and are financed as conventional mortgages.

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