Conventional Mortgage

A conventional mortgage is a mortgage loan where the borrower provides a down payment of at least 20% (as of 2026-07-27 — verify current) of the purchase price or appraised value, whichever is lower. Because the loan-to-value ratio is 80% (as of 2026-07-27 — verify current) or less, mortgage default insurance from CMHC, Sagen, or Canada Guaranty is not legally required under federal regulations. This is a product-classification term used by lenders and regulated by federal banking and housing rules; verify current lending requirements with your lender and a BC lawyer or notary before committing.

No. Under federal regulations administered by the Office of the Superintendent of Financial Institutions (OSFI) and Canada Mortgage and Housing Corporation (CMHC), mortgage default insurance is required only when the down payment is less than 20% (as of 2026-07-27 — verify current). A conventional mortgage, by definition, has at least a 20% (as of 2026-07-27 — verify current) down payment, so default insurance is not mandatory. Verify current federal mortgage insurance rules with the Financial Consumer Agency of Canada (FCAC) or your lender.

British Columbia does not have a separate provincial statute that defines "conventional mortgage" as a product category; this term is a lending-industry standard governed primarily by federal financial-services regulators (OSFI, CMHC, Bank of Canada) and individual lender policies. Provincial statutes such as the Land Title Act, RSBC 1996, c. 250, govern the registration of mortgages against BC title, but not the underwriting or insurance thresholds. For mortgage-product definitions and eligibility, consult your lender or a licensed mortgage broker, and verify all legal and tax implications with a BC lawyer or notary.

Typically, no—conventional mortgages often carry slightly higher posted interest rates than insured mortgages, because the lender assumes greater default risk without government-backed insurance. Interest-rate spreads and pricing are set by individual lenders and fluctuate with Bank of Canada policy rates and market conditions; they are not fixed by BC statute. Compare offers from multiple lenders and verify all terms with a licensed mortgage broker or financial institution before proceeding.

The type of mortgage (conventional versus insured) does not directly affect the calculation or exemptions under the Property Transfer Tax Act, RSBC 1996, c. 378. PTT is calculated on the fair market value of the property at the time of registration, and exemptions (such as the First-Time Home Buyer Exemption up to $835,000 (as of 2026-07-27 — verify current) for qualifying buyers) depend on buyer status and property use, not financing structure. Verify current PTT rates, thresholds, and exemptions at www.gov.bc.ca and with a BC lawyer or notary before closing.

Yes, you may use a conventional mortgage to finance the purchase of ALR property, provided the lender is willing to lend on agricultural land and you comply with the Agricultural Land Commission Act, SBC 2002, c. 36, which restricts non-farm use. Many lenders impose stricter underwriting criteria or higher rates for ALR properties due to resale and use restrictions. Verify your financing options with your lender and all ALR compliance obligations with a BC lawyer or notary and the Agricultural Land Commission before proceeding.

No. The Speculation and Vacancy Tax Act, SBC 2018, c. 46, imposes an annual tax based on ownership status, residency, and property use in designated taxable regions—not on the type of mortgage financing. Whether you hold a conventional or insured mortgage, you must still file an annual declaration and may owe tax if the property is not your principal residence or a qualifying long-term rental. Verify current SVT rates, exemptions, and declaration deadlines at www.gov.bc.ca and with a BC lawyer, notary, or licensed tax professional.

As of January 1, 2023, the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, SC 2022, c. 10, generally prohibits non-Canadians (with specific exceptions) from purchasing residential property in Canada; the prohibition is currently extended through January 1, 2027 (as of 2026-07-27 — verify current). The type of mortgage (conventional or insured) does not override this federal ban. Non-Canadians who qualify for an exception under the federal Act and meet BC's Additional Property Transfer Tax (20% as of 2026-07-27 — verify current) rules may still obtain conventional financing if a lender approves. Verify eligibility and all tax obligations with a BC lawyer or notary and a licensed tax professional before proceeding.

Refinancing to a conventional mortgage does not trigger Property Transfer Tax under the Property Transfer Tax Act, RSBC 1996, c. 378, because no transfer of beneficial ownership occurs. However, you will incur Land Title Office fees for registering the discharge of the old mortgage and the new conventional mortgage under the Land Title Act, RSBC 1996, c. 250; current fee schedules are published at www.ltsa.ca (as of 2026-07-27 — verify current). Verify all fees, discharge requirements, and lender penalties with your lender, lawyer, or BC notary before refinancing.

Conventional-mortgage underwriting rules and down-payment thresholds are set by federal authorities (OSFI, CMHC, Bank of Canada) and individual lenders, not by BC provincial statute. For federal mortgage insurance and lending guidelines, consult the Financial Consumer Agency of Canada (FCAC) at www.canada.ca/en/financial-consumer-agency.html and CMHC at www.cmhc-schl.gc.ca. For BC-specific legal, tax, and title matters (PTT, Land Title registration, Speculation and Vacancy Tax), verify current rules at www.gov.bc.ca and with a BC lawyer, notary, or licensed tax professional before acting.