What is CMHC Insurance (Canada Mortgage and Housing Corporation Insurance) in Canadian mortgages?
Mandatory mortgage default insurance required when down payment is less than 20% (LTV > 80%). Enables up to 95% LTV financing.
Why CMHC Insurance matters
Insurance is what lets a borrower buy with less than 20% down. The lender is protected if the borrower defaults, but the borrower pays the premium, usually by adding it to the mortgage. It changes the loan amount, the payment and the qualification math.
What is the CMHC Insurance limit for Canadian mortgages?
Premium: 2.80% to 4.00% of the loan for 80.01% to 95% LTV, plus 0.20% for amortizations over 25 years
CMHC Insurance example
Worked example
A 90% LTV mortgage requires a 3.10% CMHC premium, added to the mortgage balance.
How brokers use CMHC Insurance
- The premium is a percentage of the base loan set by LTV tier: 2.80% for 80.01% to 85%, 3.10% for 85.01% to 90%, and 4.00% for 90.01% to 95%.
- Insured purchases must be priced under $1.5 million. At $1.5 million or more the minimum down payment is 20%.
- The minimum down payment is 5% of the first $500,000 of the price and 10% of the portion from $500,000 to $1.5 million.
- In Ontario, Quebec and Saskatchewan, provincial sales tax on the premium is paid in cash at closing and is not added to the mortgage.
- CMHC, Sagen and Canada Guaranty are the three mortgage insurers, and their premium tiers are similar.
More questions about CMHC Insurance
How much is CMHC insurance?
For a standard high-ratio purchase it is 2.80% of the loan at 80.01% to 85% LTV, 3.10% at 85.01% to 90%, and 4.00% at 90.01% to 95%. A 30-year amortization adds 0.20%.
Is mortgage default insurance required?
Yes, when the down payment is under 20% of the price. It protects the lender, not the borrower.
Can I insure a home over $1.5 million?
No. Since December 15, 2024, insured mortgages are available only on homes priced under $1.5 million. At $1.5 million or more you need at least 20% down.