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:

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:

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:

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.