Low-ratio mortgage with at least 20 percent down and no required default-insurance premium.
A conventional mortgage is a mortgage with a loan-to-value ratio of 80% or less, which usually means the borrower made a down payment of at least 20%.
This term matters because it marks a major structural divide in Canadian lending. Once the down payment reaches 20% or more, the mortgage usually leaves the standard high-ratio category and moves into the conventional range.
CMHC describes a conventional mortgage as a mortgage loan up to a maximum of 80% of the property’s value. In practice, that usually means the mortgage does not require the same mandatory default-insurance treatment as a high-ratio mortgage.
Conventional mortgages can still be fixed or variable, open or closed, and they may still face lender-specific qualification rules. “Conventional” mainly describes the leverage position, not the full product design.
It is also helpful to separate conventional from uninsured mortgage and insurable mortgage. A conventional mortgage is low-ratio by structure. Whether it is uninsured or insurable is a different question.
If a buyer purchases a home with 25% down, the mortgage would generally fall into the conventional range because the loan is 75% of the property’s value.
That still does not answer every other product question. The borrower could still need to choose fixed or variable, open or closed, and could still face different lender pricing depending on the file.
Conventional mortgage does not automatically mean the best or cheapest mortgage. It simply means the leverage is low enough that the file is not in the standard high-ratio category.
Borrowers also sometimes confuse conventional mortgage with uninsured mortgage. Many conventional mortgages are uninsured, but those terms focus on slightly different things.
Another common misunderstanding is to assume conventional means easier approval. It can help on the leverage side, but income, debt ratios, credit profile, property type, and lender policy still matter.
Lender overlays, insurable categories, and product-specific rules can create edge cases. Borrowers should look beyond the label and understand the exact contract and qualification terms.