If I Put 19% Down Instead of 20%, Do I Actually Pay More in Total?
The math most buyers don't run — and why the rate isn't the number that matters.
Run the NumbersQuick Answer
Most people ask the wrong question.
They see that insured mortgages get lower rates — sometimes 0.30 to 0.40% lower — and assume that's the win. What they miss is that CMHC's premium doesn't come out of pocket. It gets added to your mortgage balance. Then you pay interest on it. For 25 or 30 years.
On a $700,000 home with 19% down, that premium is roughly $15,900 bolted onto your principal. The lower rate helps, but you're now financing the insurance itself. When you run the full cost of credit — not just the rate, the total interest paid over the life of the loan — the 20% option usually wins, even with a slightly higher rate.
I've had this conversation with clients who were genuinely surprised. They'd been optimizing for the mortgage rate. Once they saw the total borrowing cost side by side, the answer was obvious without me saying a word.
See it side by side
Move the slider to your home price. Watch the premium, the total balance, and the 5-year interest shift in real time.
Side-by-Side Comparison: 19% vs 20% Down
Adjust the home price to see how CMHC insurance, rate differences, and total interest change.
| 19% Down (Insured) | 20% Down (Uninsured) | |
|---|---|---|
| Down Payment | $133,000 | $140,000 |
| Base Mortgage | $567,000 | $560,000 |
| CMHC Premium | 2.8% = $15,876 | $0 |
| Total Mortgage Balance | $582,876 | $560,000 |
| Mortgage Rate | 4.29% | 4.64% |
| Monthly Payment | $3,158 | $3,143 |
| 5-Year Interest Paid | $116,575 | $121,383 |
The math: With 19% down you get a 0.35% lower rate, saving $15/mo on payments. But you pay $15,876 in CMHC premium added to your balance. Over 5 years, the insured mortgage pays $4,809 less in interest.
Rates shown are illustrative based on typical insured vs uninsured spreads (Q2 2026). Your actual rates will vary by lender, credit score, and market conditions. All calculations use Canadian semi-annual compounding per the Bank Act.
The Four Premium Tiers
CMHC, Sagen, and Canada Guaranty all use the same structure:
| Down Payment | LTV | Premium | On $700K |
|---|---|---|---|
| 5–9.99% | 90–95% | 4.00% | $26,600 |
| 10–14.99% | 85–90% | 3.10% | $19,530 |
| 15–19.99% | 80–85% | 2.80% | $15,876 |
| 20%+ | ≤ 80% | None | $0 |
4.00%
Highest Premium
At 5–9.99% down. On a $700K home that's $26,600 added to your balance.
$15,900
Typical Premium at 19% Down
Added to principal on a $700K purchase. You pay interest on every dollar.
$0
Premium at 20%+ Down
No insurance required. That's the entire point.
That premium doesn't disappear at closing. If your base mortgage is $567,000 and the premium is $15,876, your funded balance is $582,876. Day one, you're paying interest on the full amount.
There's a secondary effect most buyers overlook: the premium erodes your equity position. You think you're at 19% equity. After the premium is added to the balance, you're effectively closer to 17%. The insurance partially gives back what you put down.
The 30-year amortization makes this worse
If you're choosing a 30-year amortization, the CMHC math compounds.
Lenders charge roughly 0.05–0.25% more for 30-year terms. That applies whether you're insured or not. But first-time buyers on insured 30-year mortgages also pay an additional 0.20% CMHC surcharge — so the premium itself goes up.
On a $700K purchase with 10% down, that surcharge adds about $1,134 to your balance before you make a single payment.
The monthly payment is a trap
December 2024 changed the ceiling, not the logic
On December 15, 2024, the federal government raised the insured mortgage cap from $1 million to $1.5 million. Buyers in high-cost markets can now purchase with less than 20% down at price points that previously required a full 20%.
That's a meaningful change for access. It doesn't change the underlying math.
On a $1.2M purchase at minimum down, the CMHC premium runs about $44,200. That goes on your mortgage. Whether the insured rate offsets that over your actual holding period depends on your numbers, not the headline rate.
So when does 19% actually win?
It's not a trick question. Sometimes it's the right call.
If you're buying a $500K home with $100K saved, putting 10% down and keeping $50K liquid isn't reckless — it's a cash flow decision. Emergencies are real. Liquidity has value. The question is whether you're choosing 10% down because it's the right financial decision or because you're avoiding doing the math.
The 1% rule of thumb
FAQ
Go Deeper on What Matters to You
These guides break down the costs and rules around CMHC insurance and your mortgage.
Cost of Borrowing Guide
See the full picture of what your mortgage really costs beyond the rate.
Read GuideFirst-Time Buyer Guide
FHSA, HBP, down payment rules, and everything first-time buyers need.
Read Guide25 vs 30 Year Amortization
How amortization length changes your total cost of credit.
Read Guide
Camilo Rodriguez
Founder of Mortgages Lab & Mortgage Expert
Camilo Rodriguez is the Founder of Mortgages Lab, a licensed mortgage broker with over 23 years of experience helping Canadians achieve financial freedom. He has trained 100+ mortgage agents across Canada and is Past President of The Canadian Mortgage Broker Association - BC. He is the author of "From Debt to Zero," a guide to becoming mortgage free.
P.A.Y.O.F.F™, L.A.B™, M.A.P™ are Trademarks of Mortgages Lab®
Financial Disclosure
This page contains informational content only and does not constitute financial advice. Mortgage rates shown are sourced from publicly available lender data and may change without notice. Always verify rates directly with the lender. Mortgages Lab may receive compensation from partner lenders, which does not influence our editorial content or rate rankings. Built on Real Experience — 23+ years of working with real mortgage scenarios and helping Canadians achieve financial freedom.
Ready to Take Action?
Run your numbers in the calculator above, or compare today's rates from 30+ lenders across Canada.