Mortgage rate pricing is based much on insurance:
Insured mortgages are covered by mortgage default insurance through one of three insurers – CMHC, Genworth or Canada Guaranty. A premium is added to the mortgage amount. The amount is a percentage of the loan based on the loan to value ratio with a down payment of less than 20%. These mortgages are most favored by the banks and are reflected by the best rate offers.
Insurable mortgages do not necessarily require you to pay an insurance premium when you are providing a down payment larger than 20%. However, if the insurers rules allow, the lender has the option to obtain insurance them selves.
Uninsurable mortgages do not meet the insurers rules; such as refinances and mortgages with amortization longer than 25 years. So, no premium can be paid by either the borrower of the lender to obtain default insurance. The risk associated with these mortgages is passed onto the borrower via higher interest rates.