Key Takeaway

CMHC mortgage insurance is required in Canada when you make a down payment of less than 20 per cent of the home purchase price. The insurance premium ranges from 0.60 per cent to 4.00 per cent of your mortgage amount, depending on the size of your down payment, and is typically added to your mortgage balance. This insurance protects the lender if you default on your mortgage, but it allows you to purchase a home sooner with a smaller down payment.

When CMHC Mortgage Insurance Is Required

According to the Canada Mortgage and Housing Corporation, mortgage default insurance is mandatory when your down payment is less than 20 per cent of the home price (CMHC, 2026). This means your loan-to-value ratio (LTV) exceeds 80 per cent.

The minimum down payment in Canada varies by purchase price. For homes priced at C$500,000 or less, you need at least 5 per cent down. For homes between C$500,000 and C$1 million, you need 5 per cent on the first C$500,000 and 10 per cent on the remaining amount. Homes over C$1 million require a 20 per cent down payment and are not eligible for mortgage default insurance.

While CMHC is the best-known provider, two private insurers also offer mortgage default insurance in Canada: Sagen (formerly Genworth Canada) and Canada Guaranty. The requirements and premium rates are similar across all three providers, and your lender typically selects which insurer to use.

What CMHC Insurance Costs

CMHC insurance premiums are calculated as a percentage of your mortgage amount, not your home price. The premium rate depends on your loan-to-value ratio, as outlined in foundational mortgage finance texts such as Principles of Finance.

As of September 2026, the premium rates are:

  • LTV up to 65 per cent: 0.60 per cent
  • LTV 65.01 to 75 per cent: 0.70 per cent
  • LTV 75.01 to 80 per cent: 1.25 per cent
  • LTV 80.01 to 85 per cent: 1.80 per cent
  • LTV 85.01 to 90 per cent: 2.40 per cent
  • LTV 90.01 to 95 per cent: 4.00 per cent

For example, if you purchase a C$400,000 home with a 5 per cent down payment (C$20,000), your mortgage amount is C$380,000 and your LTV is 95 per cent. The insurance premium would be C$380,000 x 4.00 per cent = C$15,200.

Most borrowers add the premium to their mortgage balance rather than paying it upfront, which means you pay interest on the insurance premium over the life of your mortgage term and amortization period.

Qualifying for CMHC-Insured Mortgages

To qualify for CMHC mortgage insurance, you must meet the lender’s approval criteria and pass the OSFI mortgage stress test established under the B-20 guideline. The Financial Consumer Agency of Canada notes that this stress test requires you to qualify at the greater of your contract rate plus 2 percentage points or 5.25 per cent (FCAC, 2026).

Read also: How to Calculate CMHC Mortgage Insurance Premiums in Canada

Additional requirements include:

  • The property must be your primary residence (not an investment property or second home)
  • Maximum amortization period of 25 years for insured mortgages (extended to 30 years for first-time buyers and certain new builds as of recent policy changes)
  • Property purchase price under C$1 million
  • Minimum credit score requirements set by individual lenders (typically 600 or higher)

Self-employed borrowers can qualify for CMHC insurance but may need to provide additional income documentation.

When You Can Avoid CMHC Insurance

If you make a down payment of 20 per cent or more, you are not required to purchase mortgage default insurance. This reduces your total borrowing costs, since you avoid the insurance premium entirely.

Some borrowers choose to delay their purchase to save a larger down payment specifically to avoid insurance costs. However, this strategy must be weighed against rising home prices and rental costs during the additional saving period. Running the numbers for your specific situation helps determine whether waiting makes financial sense.

Your Next Step

Calculate your total mortgage costs including the CMHC insurance premium using online mortgage calculators, then speak with a licensed mortgage broker or your financial institution to confirm current premium rates, qualification requirements, and whether any first-time home buyer programs or incentives apply to your situation. Mortgage rules and premium rates can change, so verify the details before making your down payment decision.

Financial Disclaimer: This article provides general educational information about CMHC mortgage insurance in Canada and is not personalized financial, lending, legal, or tax advice. Mortgage insurance requirements, premium rates, qualification criteria, and available programs vary by lender, property type, location, and your individual financial circumstances. The information provided is current as of September 2026; rates and policies change frequently. Consult with a licensed mortgage broker, mortgage professional, or the Financial Consumer Agency of Canada for guidance specific to your situation before making any home financing decisions.