A lot of the mortgages arranged through monolines and even the banks are insured "behind the scenes", when the client has 20% down payment or more at the time of the purchase, and the bank/lender pays that insurance cost. When such purchase is made with less than 20% downpayment, the client is the one required to pay the insurance premium, so the lender does not need to factor that in the transaction costs and can offer lower rates to the client.
If a client purchase a property in this scenario (less than 20% downpayment) that mortgage will be insured by CMHC/Genworth/Canada Guaranty and that insurability can be transferred from lender to lender, so in the case of a transfer between 2 financial institutions, the new lender will not have to purchase bulk insurance for the loan, and as a result the lender can offer the same rates a client purchasing a property today with less than 20% D/P (called a "high ratio" mortgage) would get.
So, client purchased a condo with 10% 5y ago (so his mortgage had default insurance with CMHC/GE/CG). Now he can transfer that mortgage to another bank/lender and if the new lender has a better rate for insured mortgages, he will qualify for that lower rate.
If the same client had 20% down payment or more (therefore the mortgage did not require default insurance) and the client wants to move to a new lender, the lender may want to insure that loan (they are not required, but often prefer to do so) and as a result the client may not qualify for "insured" or "high ratio" rates.
FSCO # 10428 - Mortgage Intelligence