CMHC Mortgage Insurance: Complete Guide for Canadian Brokers (2026)

What Is CMHC Mortgage Insurance?

CMHC (Canada Mortgage and Housing Corporation) provides mortgage default insurance to lenders when borrowers have less than 20% down payment. This insurance guarantees the lender will be repaid even if the borrower defaults.

Key insight: CMHC insurance protects the LENDER, not the borrower. The borrower pays the premium but gets the benefit of lender willingness to offer high-LTV mortgages at A-lender rates.

Two other approved insurers exist alongside CMHC: Sagen (formerly Genworth Canada) and Canada Guaranty. All three operate under the same National Housing Act rules.

When Is CMHC Insurance Required?

CMHC insurance is mandatory when: • Down payment is less than 20% of purchase price (LTV > 80%) • Property is owner-occupied residential (1-4 units) • Purchase price is ≤ $1,500,000

CMHC insurance is NOT available for: • Refinances (max 80% LTV applies to all refinances) • Investment/rental properties • Properties over $1,500,000 • Amortizations over 30 years (25yr is standard; 30yr available for some) • Non-owner-occupied properties

CMHC Premium Schedule (2026)

The premium is calculated as a percentage of the insured mortgage amount, then added to the mortgage balance.

Amortization Surcharge

A +0.20% surcharge applies when the amortization period exceeds 25 years: • 25yr amortization: Standard premium rates above • 26-30yr amortization: Add 0.20% to base premium

Example: 90% LTV with 30yr amortization: 4.00% + 0.20% = 4.20% premium

PST on CMHC Premiums

Provincial sales tax applies to the CMHC premium in four provinces: • Ontario: 8% PST • Quebec: 9% QST • Manitoba: 7% PST • Saskatchewan: 6% PST

PST must be paid upfront at closing — it cannot be added to the insured mortgage. This is an often-overlooked closing cost.

CMHC Eligibility Requirements

To qualify for CMHC insurance: • Minimum credit score: 600 (many lenders require 680+) • Maximum GDS: 39% (at qualifying rate) • Maximum TDS: 44% (at qualifying rate) • Property must be owner-occupied as primary residence • Property must be in Canada • Borrower must be a Canadian citizen, permanent resident, or have valid work permit • Property purchase price ≤ $1,500,000 (updated December 2024) • Maximum amortization: 25 years (30yr allowed for some properties under $1M)

Down Payment Sources for Insured Mortgages

CMHC-approved down payment sources: • Personal savings (chequing/savings accounts, 90-day history required) • RRSP Home Buyers' Plan withdrawal (up to $35,000/person) • First Home Savings Account (FHSA) withdrawal • Gift from immediate family member (gift letter required, not a loan) • Proceeds from sale of another property

NOT acceptable: • Borrowed funds from unsecured loans or credit cards • Cash (without documented source)

Lender Requirements for Insured Deals

Not all lenders offer insured mortgage programs. CMHC-approved lenders must: • Be federally or provincially regulated financial institutions • Hold an approved lender status from CMHC/Sagen/Canada Guaranty • Follow CMHC underwriting guidelines

BIPS automatically filters lenders to show only those with insured programs for deals requiring CMHC.