If you're buying a home in Canada with less than 20% down, mortgage default insurance isn't optional â it's required by law. Most Canadians know it as "CMHC insurance," though it can also be provided by Sagen (formerly Genworth Canada) or Canada Guaranty. Understanding how it works, what it costs, and when it makes sense to avoid it can save you thousands of dollars.
Use our mortgage payment calculator â enter your home price and down payment and it automatically calculates your CMHC premium, adds it to your mortgage, and shows your exact monthly payment.
What is CMHC mortgage insurance?
CMHC mortgage insurance â officially called mortgage default insurance â protects your lender, not you. If you default on your mortgage, the insurer pays the lender. In exchange for this protection, lenders offer insured mortgages at lower interest rates than uninsured mortgages, which is why insured buyers often end up with better rates despite paying the premium.
The Canada Mortgage and Housing Corporation (CMHC) is the largest provider, but the insurance is also available through two private insurers: Sagen and Canada Guaranty. All three are federally regulated and offer identical premium rates.
Who is required to get CMHC insurance?
Mortgage default insurance is mandatory if all of the following apply:
- Your down payment is less than 20% of the purchase price
- The property is in Canada and will be your primary residence
- The purchase price is $1.5 million or less (this limit increased from $1 million on December 15, 2024)
- Your amortization period is 30 years or less (25 years for insured mortgages before the 2024 rule change; first-time buyers and new builds can now access 30-year insured amortizations)
Effective December 15, 2024, the insured mortgage cap increased to $1.5 million. First-time homebuyers and buyers of new construction can now access 30-year amortizations on insured mortgages. These changes significantly affect affordability calculations â make sure your lender is quoting you under the updated rules.
CMHC premium rates for 2026
The premium is calculated as a percentage of your total mortgage amount (not the purchase price). The less you put down, the higher the premium rate:
| Down Payment | Loan-to-Value Ratio | Premium Rate | Premium on $500K mortgage |
|---|---|---|---|
| 5% (minimum) | 95% | 4.00% | $20,000 |
| 10% | 90% | 3.10% | $15,500 |
| 15% | 85% | 2.80% | $14,000 |
| 20%+ | 80% or less | Not required | $0 |
The premium is added to your mortgage balance â you don't pay it upfront (though PST applies in Ontario, Manitoba, and Quebec and must be paid at closing). You pay it off as part of your regular mortgage payments over your full amortization.
A real example: $700,000 home with 5% down
- Purchase price: $700,000
- Down payment (5%): $35,000
- Mortgage before insurance: $665,000
- CMHC premium (4.00%): $26,600
- Total mortgage: $691,600
- Monthly payment at 5.5% over 25 years: ~$4,293
That $26,600 premium spread over 25 years adds roughly $157 per month to your payment. But because the insured rate is typically 0.10â0.25% lower than uninsured rates, the savings on your interest rate can partially offset the premium cost over time.
See your exact CMHC premium and payment
Enter your home price, down payment, and rate to see your CMHC premium, total mortgage amount, and monthly payment â with full amortization schedule.
â Calculate My MortgageShould you put more than 20% down to avoid CMHC?
This is one of the most common questions in Canadian homebuying, and the answer isn't always obvious.
When avoiding CMHC makes sense
- You have the savings and won't be depleting your emergency fund or investment accounts
- The premium savings are greater than the investment returns you'd earn on that money
- You're buying a higher-priced home where the premium is very large in dollar terms
When paying CMHC might be the better move
- Your investments earn more than the effective cost of the insurance (often true in long bull markets)
- You need to preserve cash for renovations, moving costs, or an emergency fund
- Getting into the market sooner matters more than saving on insurance (relevant in appreciating markets)
- The insured rate you're offered is meaningfully lower than the uninsured rate â partially offsetting the premium
There's no universal right answer. It depends on your savings, investment returns, local market conditions, and how long you plan to stay in the home. A mortgage broker can run the specific numbers for your situation.
CMHC insurance vs title insurance vs mortgage life insurance
These three types of insurance sound similar but protect completely different things:
- CMHC mortgage insurance â protects the lender if you default. Required if under 20% down. Cost: 0.60%â4.00% of mortgage
- Title insurance â protects you and your lender against title disputes, fraud, and survey errors. Usually ~$300â$500, one-time. Recommended for all buyers
- Mortgage life insurance â pays off your mortgage if you die. Sold by lenders but often overpriced compared to term life insurance â get quotes from both before deciding
Frequently asked questions
Who needs CMHC mortgage insurance in Canada?
Any buyer with less than 20% down on a home priced at $1.5 million or less. It's required by federal law â no lender can give you a high-ratio mortgage without it.
How much does CMHC insurance cost?
Between 2.80% and 4.00% of your mortgage amount, depending on your down payment. On a $600,000 mortgage with 5% down, that's $24,000 added to your mortgage. The premium is paid over the life of your mortgage, not upfront.
Can I get a mortgage without CMHC insurance?
Yes â if you put down 20% or more of the purchase price. You can also avoid it if the home costs more than $1.5 million (in which case 20% down is required anyway). Some credit unions in certain provinces can offer uninsured mortgages under 20% down, but this is uncommon.
Is CMHC the only mortgage insurer in Canada?
No. There are three approved mortgage default insurers in Canada: CMHC (federal crown corporation), Sagen (formerly Genworth Canada), and Canada Guaranty. All three charge identical premium rates. Your lender chooses which insurer to use â you don't get to pick.
What is the maximum home price for CMHC insurance in 2026?
$1.5 million, effective December 15, 2024. Homes above this price require at least 20% down and are not eligible for insured mortgages.