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High-Ratio Mortgage Canada | Less Than 20% Down Payment

Updated

High-Ratio Mortgages in Canada

A high-ratio mortgage has a loan-to-value (LTV) ratio greater than 80% — meaning your down payment is less than 20%.

High-Ratio vs Conventional

Feature High-Ratio Conventional
Down payment Less than 20% 20% or more
LTV ratio Over 80% 80% or less
Mortgage insurance Required Not required
Max amortization 25 years 30 years
Max home price $1.5 million No limit

Minimum Down Payment Requirements

Home Price Minimum Down Payment Amount on $600K Home
Up to $500,000 5% $25,000
$500,001 - $999,999 5% + 10% above $500K $35,000*
$1,000,000 - $1,499,999 5% + 10% above $500K N/A
$1,500,000+ 20% (not insurable) N/A

*$25,000 on first $500K + $10,000 on remaining $100K = $35,000

CMHC Insurance Premiums

Down Payment Premium Rate On $500K Mortgage
5% - 9.99% 4.00% $20,000
10% - 14.99% 3.10% $15,500
15% - 19.99% 2.80% $14,000
20%+ 0% (not required) $0

Example: $600,000 Home with 5% Down

Component Amount
Home price $600,000
Down payment (5% on $500K + 10% on $100K) $35,000
Mortgage amount $565,000
CMHC premium (4.0%) $22,600
Total mortgage $587,600

Insurance Premium Added to Payments

The CMHC premium is added to your mortgage:

Scenario Without Insurance With Insurance
Mortgage $475,000 $494,000
Monthly (5%, 25yr) $2,770 $2,881
Extra/month — $111
Total extra paid — ~$33,300

Mortgage Insurance Providers

Provider Market Share
CMHC (Canada Mortgage and Housing) ~50%
Sagen (formerly Genworth) ~30%
Canada Guaranty ~20%

All three charge similar premiums. Your lender chooses the provider.

High-Ratio Mortgage Rules

Requirements

Rule Details
Minimum credit score 600+ (often 680+ for best rates)
Maximum amortization 25 years
Maximum home price $1,499,999
Property type Must be owner-occupied
Debt service ratios GDS ≤ 39%, TDS ≤ 44%
Stress test Must qualify at higher rate

Restrictions

Not Allowed Details
30-year amortization Max 25 years with insurance
Investment properties Must live in the home
Homes over $1.5M Not eligible for insurance
Refinancing Can’t insure a refinance

Benefits of High-Ratio Mortgages

Benefit Explanation
Get into market sooner Don’t need to save 20%
Often lower rates Insurance reduces lender risk
Build equity faster Start paying down sooner
Market appreciation Benefit from rising prices

Drawbacks of High-Ratio Mortgages

Drawback Impact
Insurance premium Adds thousands to mortgage
25-year max amortization Higher monthly payments
Stress test required May qualify for less
Higher total interest Longer payoff, more interest

High-Ratio vs 20% Down: Comparison

$600,000 home, 5.5% rate:

Metric 5% Down 20% Down
Down payment $35,000 $120,000
Mortgage $587,600 $480,000
Amortization 25 years 30 years
Monthly payment $3,593 $2,718
Total paid $1,077,900 $978,480
Total interest $490,300 $498,480

With 5% down, you pay more monthly but start building equity 85K sooner.

Should You Get a High-Ratio Mortgage?

Consider High-Ratio If:

  • Housing prices are rising
  • Rent is comparable to ownership costs
  • Your income will increase
  • You want to stop renting sooner

Consider Waiting for 20% If:

  • You can save quickly
  • Housing prices are flat/falling
  • You want lower monthly payments
  • You prefer 30-year amortization

CMHC insurance premiums table (2026)

Down payment LTV ratio CMHC premium (% of loan)
5% 95% 4.00%
10% 90% 3.10%
15% 85% 2.80%
20% 80% 0% (no insurance required)

Example: Purchase price $650,000, 10% down ($65,000). Insured loan = $585,000 × 3.10% = $18,135 CMHC premium, added to the mortgage (total mortgage = $603,135). This is also subject to provincial sales tax on the premium in Ontario and Quebec at closing.

High-ratio mortgage limits (2026)

  • Maximum purchase price: $1,499,999 (homes $1.5M+ require 20% down — no CMHC insurance available)
  • Maximum amortization with CMHC insurance: 30 years (for first-time buyers and new-build purchases); 25 years for all other insured mortgages
  • Minimum credit score: 680 for most insured mortgage lenders
  • Property types: Owner-occupied; rental properties with 2–4 units (owner must live in one)

Frequently asked questions

Is CMHC insurance the same as mortgage protection insurance? No — these are completely different products. CMHC default insurance protects the lender if you default on your mortgage. You pay the premium, but the benefit goes to the lender. Mortgage protection insurance (offered by banks and insurers) protects you (or your estate) — it pays off your mortgage if you die or become disabled. The latter is optional; CMHC insurance is mandatory for high-ratio mortgages.

Can I avoid CMHC insurance by splitting my mortgage? Some lenders previously offered “cashback” mortgages or second mortgage structures to boost down payments above 20%. OSFI regulations now prevent lenders from using borrowed funds to meet the 20% threshold. Your down payment must come from your own savings, RRSP HBP, FHSA, or a gift from an immediate family member.

Does CMHC insurance apply in all provinces? CMHC provides the coverage, but Sagen and Canada Guaranty are two private alternatives that offer equivalent coverage. The premiums are identical across providers. In Saskatchewan and Manitoba, CMHC insures both buyer and lender sides; in other provinces, only the lender side is insured. All three providers are approved by the federal government.