10 Types of Mortgages in British Columbia Every Buyer Should Know

Michael A. Jones – PREC* | Royal LePage Kelowna

In British Columbia, home buyers have access to a variety of mortgage types depending on their financial profile, down payment, and property goals. Whether you’re a first-time buyer or moving up, understanding your options can help you make a smart, informed decision.

1. Insured Mortgage

• Requires: Less than 20% down payment
• Max Purchase Price: $1 million
• Premium: Mortgage insurance is added to your loan
• Benefit: Lower interest rates (typically)
• Limitation: Stricter qualification rules (stress test)

These are backed by providers like CMHC, Sagen, or Canada Guaranty.

2. Uninsured (Conventional) Mortgage

• Requires: 20% or more down payment
• Used For: Homes over $1M or buyers with large down payments
• Benefit: No insurance premiums, more flexibility

3. Fixed-Rate Mortgage

• Rate: Stays the same for the full term
• Benefit: Predictable payments
• Drawback: Higher penalties if broken early

4. Variable-Rate Mortgage

• Rate: Floats with lender’s prime rate
• Benefit: Lower initial interest rate
• Risk: Payment may increase if rates rise

5. Adjustable-Rate Mortgage

• Similar to a variable-rate mortgage
• Key Difference: Payment amount changes immediately with prime
• Good For: Buyers who want to pay down more if rates fall

6. Open Mortgage

• Can be paid off: Anytime without penalty
• Interest Rate: Higher
• Best For: Buyers planning to sell or refinance soon

7. Closed Mortgage

• Lower interest rate than open mortgage
• Penalty: For early payout
• Most common for long-term buyers

8. HELOC (Home Equity Line of Credit)

• Access: Credit based on home equity
• Often paired with: Mortgage at time of purchase
• Best For: Renovations, cash flow, or flexibility

9. Cashback Mortgage

• Gives cash back at closing (usually 1–5%)
• Used For: Covering legal, closing, or moving costs
• Downside: Higher interest rate

10. Purchase Plus Improvements Mortgage

• Allows you to finance renovations as part of your mortgage
• Best For: Fixer-uppers or dated homes

Want to Compare Today’s Rates?

Use this trusted Canadian tool to view up-to-date mortgage rates across lenders: Compare Mortgage Rates on WOWA →

Related Reading

• Insured vs. Uninsured Mortgages in Kelowna
• Closing Costs in BC: What You Should Budget For
• BC Home Buying Process: From Offer to Completion

Not sure which mortgage type fits your needs? Let’s connect. I’ll help you navigate the options, connect with local brokers, and make sure you know what to expect before you commit.