CMHC Insurance: What Every First-Timer Needs to Know

What Is CMHC Mortgage Insurance?

CMHC (Canada Mortgage and Housing Corporation) mortgage insurance — also called mortgage default insurance — is mandatory in Canada whenever your down payment is less than 20% of the home's purchase price. It protects the lender (not you) in case you default on your mortgage.

Despite protecting the lender, you pay the premium. It's added to your mortgage balance and amortized over your mortgage term.

Who Requires It?

All federally regulated lenders (banks, credit unions) are required by law to obtain mortgage default insurance when your down payment is between 5% and 19.99%. You can also get it through Sagen or Canada Guaranty — two private insurers — but CMHC is the largest provider.

CMHC Premium Rates (2026)

Down Payment	Premium (% of mortgage)
5% – 9.99%	4.00%
10% – 14.99%	3.10%
15% – 19.99%	2.80%

Example Calculation

Say you're buying a $700,000 home with a 10% down payment ($70,000). Your mortgage is $630,000.

• CMHC premium: $630,000 × 3.10% = $19,530
• Total insured mortgage: $649,530
• You also pay PST on the premium at closing (Ontario: 8%)

Purchase Price Limits

As of 2024, CMHC insurance is available on homes priced up to $1.5 million. Homes above $1.5M require a minimum 20% down payment and are not insurable.

Can You Avoid CMHC?

Yes — save a 20% down payment. On a $700,000 home that's $140,000. The CMHC premium you'd save: roughly $19,000–$22,000 depending on your down payment percentage. But saving the extra cash takes time, and waiting can mean missing the right market window.

CMHC and Your Monthly Payment

Because the premium is added to your mortgage balance, it slightly increases your monthly payment. On the example above, adding $19,530 to a 25-year amortization at 5.5% adds roughly $120/month.

Bottom Line

CMHC insurance lets you get into the market sooner with as little as 5% down, but it has a real cost. Use our CMHC calculator to see exactly what you'd pay — and what it does to your monthly payment.