CMHC Mortgage Insurance: What It Costs and When You Need It
If you buy a home in Canada with less than 20% down, your mortgage must be insured against default. Most people call it "CMHC insurance", after the Canada Mortgage and Housing Corporation. It protects the lender, not you — but you pay for it. Here's when it applies, what the premium costs, and how to calculate it.
Key takeaways
- Mortgage default insurance is required when your down payment is under 20% of the purchase price.
- The premium runs from 0.60% to 4.00% of the mortgage, depending on how much you put down, and is usually added to the mortgage.
- Ontario, Quebec and Saskatchewan charge provincial sales tax on the premium, payable at closing.
- Insured mortgages are available on homes priced under $1.5 million.
When you need mortgage insurance
Federally regulated lenders must insure any mortgage where the loan is more than 80% of the home's value. In practice that means any purchase with less than 20% down. Three companies provide it: the Canada Mortgage and Housing Corporation (CMHC), a federal Crown corporation, and two private insurers, Sagen and Canada Guaranty. Your lender chooses the insurer; their premiums are broadly similar.
Insurance also brings rules. To be insurable, the home must be priced below $1.5 million — the cap rose from $1 million on December 15, 2024 — and your amortization can be at most 25 years, or 30 years if you're a first-time buyer or buying a newly built home.
CMHC insurance premiums
The premium is a percentage of the mortgage amount, based on your loan-to-value ratio:
| Loan-to-value | Down payment | Premium on the mortgage |
|---|---|---|
| Up to 65% | 35% or more | 0.60% |
| 65.01% – 75% | 25% – 34.99% | 1.70% |
| 75.01% – 80% | 20% – 24.99% | 2.40% |
| 80.01% – 85% | 15% – 19.99% | 2.80% |
| 85.01% – 90% | 10% – 14.99% | 3.10% |
| 90.01% – 95% | 5% – 9.99% | 4.00% |
Two adjustments to know:
- Amortization over 25 years adds a surcharge of 0.20% to the premium rate.
- A non-traditional down payment (for example, borrowed funds) at 90.01–95% loan-to-value carries a premium of 4.50%.
Mortgages with 20% or more down don't require insurance on a purchase. The lower bands mostly apply when a lender chooses to insure a mortgage it isn't required to.
Worked example: a $600,000 home
The minimum down payment on $600,000 is 5% of the first $500,000 ($25,000) plus 10% of the remaining $100,000 ($10,000): $35,000, or about 5.83%.
| Minimum down | 10% down | 15% down | |
|---|---|---|---|
| Down payment | $35,000 | $60,000 | $90,000 |
| Mortgage before insurance | $565,000 | $540,000 | $510,000 |
| Loan-to-value | 94.17% | 90.00% | 85.00% |
| Premium rate | 4.00% | 3.10% | 2.80% |
| Premium added to mortgage | $22,600 | $16,740 | $14,280 |
| Total mortgage | $587,600 | $556,740 | $524,280 |
In Ontario, the buyer at minimum down would also pay 8% provincial sales tax on the $22,600 premium — $1,808 — at closing. The tax can't be added to the mortgage. A first-time buyer choosing a 30-year amortization would pay 4.20% instead of 4.00%, a premium of about $23,730.
Notice how much the premium drops at each threshold. Moving from 9.99% to 10% down, or 14.99% to 15%, can save thousands — worth checking before you settle on a down payment. A CMHC mortgage calculator (sometimes called a mortgage insurance calculator) or our mortgage payment calculator will show the effect on your payment.
What CMHC insurance does — and doesn't — do
- It protects the lender if you default. It doesn't cover your payments if you lose your job or become ill; that's mortgage life or disability insurance, a separate and optional product.
- It usually gets you a lower rate. Because the risk sits with the insurer, insured mortgages are often priced below uninsured ones. See how mortgage rates are set.
- It applies the stress test. You'll qualify at the greater of your contract rate plus 2% or 5.25%, with debt ratios of 39% (GDS) and 44% (TDS). See how much mortgage you can afford.
- It's paid once. The premium is a one-time charge, normally added to the mortgage. If you later port the mortgage to a new home and borrow more, a top-up premium may apply.
Can you avoid it?
Only by putting down 20% or more, or by using a lender that doesn't require it — typically at a higher rate. For many first-time buyers, paying the premium and buying sooner is the better trade. Our first-time home buyer page covers programs that help build a down payment.
Sources
This article is general information, not financial advice. Premiums and eligibility rules are set by the insurers and can change; your lender will confirm the premium on your mortgage. Mortgage financing is subject to lender and insurer approval.
Frequently asked questions
The mortgage insurance cost is between 0.60% and 4.00% of the mortgage amount, depending on your down payment, plus 0.20% if the amortization is over 25 years. On a typical minimum-down purchase it's 4.00%.
No. It's a one-time premium, usually added to the mortgage and repaid as part of your regular payments. The provincial sales tax on it, where it applies, is paid in cash at closing.
CMHC is the federal Crown corporation that insures mortgages, publishes housing data and runs national housing programs. Sagen and Canada Guaranty are private insurers offering similar mortgage insurance.
No. Homes priced at $1.5 million or more need at least 20% down and can't be insured.
Not on a standard refinance. Refinances are generally limited to 80% of the home's value and are uninsured; see our refinance page.
Not sure how much to put down?
We'll show you the premium, rate and payment at each down payment level, side by side, before you commit.