Every residential file lands in one of three buckets, and the bucket is chosen for you by the facts of the deal. It determines the rate tier the lender can offer before you have discussed a single basis point.
Insured means default insurance applies and the borrower pays the premium — typically where the down payment is under 20%. Insurable means the borrower put down 20% or more, but the deal still fits insurer rules, so the lender can insure it on the back end at its own cost. Uninsurable means no insurance is possible, so the lender carries the whole risk and prices accordingly.
Uninsurable is not a judgement about the borrower. It is usually a structural feature of the deal.
Two federal changes took effect on 15 December 2024 and a great deal of training material still has not caught up. First, the maximum purchase price eligible for default insurance rose from $1 million to $1.5 million. Second, 30-year amortizations became available on insured mortgages for first-time buyers and for buyers of newly built homes.
If you learned this material before 2025, or from a deck that was, check the figures. A file you would once have called uninsurable at $1.2 million is now insurable, and that is a materially different rate.
Below $500,000 the minimum is 5%. Between $500,000 and just under $1.5 million it is 5% on the first $500,000 plus 10% on the balance. At $1.5 million and above, 20% is required and the file is uninsurable.
Worked through on a $1.2 million purchase: 5% of $500,000 is $25,000, plus 10% of the remaining $700,000 is $70,000 — a minimum of $95,000, or roughly 7.9%.
Your client is refinancing to consolidate debt and will keep 25% equity in the home. Which category applies?
Refinances are uninsurable full stop — equity position does not rescue them. This trips people up because 25% equity looks like a strong file, and it is, but strength is not the test. Insurability is decided by the nature of the transaction first. Expect a higher rate tier than a purchase at the same loan-to-value.
