What is CMHC mortgage insurance in Canada?

CMHC mortgage insurance (also called mortgage default insurance or high-ratio insurance) is mandatory insurance paid by the borrower when your down payment is less than 20% of the purchase price. It protects the lender — not you — if you default. The premium is added to your mortgage balance and amortized into your payments. CMHC (Canada Mortgage and Housing Corporation) is the Crown corporation that provides this insurance, but two private insurers (Sagen and Canada Guaranty) also offer identical products.

How much is CMHC insurance in Canada?

The premium is a percentage of your insured mortgage amount, ranging from 2.80% to 4.00% depending on your down payment size. For a $600,000 purchase with 5% down ($30,000), your insured mortgage is $570,000 and the premium is $570,000 × 4.00% = $22,800, added to your mortgage. The premium is also subject to provincial sales tax (PST or QST) in some provinces, which is paid upfront.

Can you avoid CMHC insurance in Canada?

Yes — by putting down 20% or more of the purchase price, your mortgage becomes uninsured (conventional) and no insurance premium applies. You can also avoid it by purchasing a property valued under the CMHC-insurable limit (properties over $1.5 million are not eligible for insured mortgages). There is no other legitimate way to avoid the premium if you have less than 20% down.

Is CMHC insurance refundable in Canada?

No. The premium is non-refundable. If you sell your home before the mortgage is paid off, you receive no refund of the portion of the premium remaining in your balance. If you port your mortgage (transfer it to a new property), the insured status carries over and a new premium is only charged on any top-up amount.

What is the maximum purchase price for CMHC insurance in Canada?

As of January 2025, the insured mortgage limit was raised. Homes up to $1.5 million are eligible for CMHC-insured mortgages. Homes above $1.5 million require at least 20% down and are not eligible for insured mortgages. Note: the minimum down payment for properties between $500,000 and $999,999 is 5% on the first $500,000 and 10% on the remainder.

What is the difference between CMHC, Sagen, and Canada Guaranty?

All three offer identical mortgage default insurance products with the same premiums set by OSFI. CMHC is a federal Crown corporation. Sagen (formerly Genworth Canada) and Canada Guaranty are private companies. Lenders choose which insurer to use — borrowers do not get to pick. The premiums, coverage, and portability are functionally identical across all three.

CMHC Mortgage Insurance in Canada: What It Is, What It Costs, and How to Avoid It (2026)

What CMHC Insurance Actually Is (And Is Not)

It protects the lender. If you default on your mortgage, CMHC (or Sagen/Canada Guaranty) pays the lender. The insurer then pursues you for repayment. This is the opposite of home insurance or life insurance — the premium you pay provides no direct benefit to you.

Why does it exist? It lets lenders offer mortgages to buyers with less than 20% down without taking on the full default risk themselves. This makes homeownership accessible to more Canadians but creates a premium cost borne by borrowers.

When CMHC Insurance Is Required

Down Payment	LTV Ratio	Insurance Required?
Less than 5%	Over 95%	Not eligible for insured mortgage
5%	95%	Yes
10%	90%	Yes
15%	85%	Yes
19.99%	~80%	Yes (just under threshold)
20%+	80% or less	No (conventional mortgage)

The 2026 CMHC Premium Table

Down Payment %	LTV Ratio	Premium (% of insured amount)
5.00–9.99%	90.01–95%	4.00%
10.00–14.99%	85.01–90%	3.10%
15.00–19.99%	80.01–85%	2.80%
20%+	≤80%	0% — no insurance required

For extended amortization (25+ years), premiums are higher for first-time buyers on new builds.

How Much CMHC Insurance Actually Costs: Real Dollar Examples

Purchase Price	Down Payment	Down %	Insured Amount	Premium Rate	Premium $	Added to Mortgage
$400,000	$20,000	5%	$380,000	4.00%	$15,200	$395,200
$600,000	$30,000	5%	$570,000	4.00%	$22,800	$592,800
$750,000	$75,000	10%	$675,000	3.10%	$20,925	$695,925
$900,000	$135,000	15%	$765,000	2.80%	$21,420	$786,420
$1,000,000	$200,000	20%	$800,000	0%	$0	$800,000

Insight: On a $600,000 home, the difference between 5% down and 20% down is a $22,800 insurance premium vs. needing an extra $90,000 in down payment. For many buyers, paying the premium and getting into the market sooner has historically made financial sense — particularly in rising markets.

The Minimum Down Payment Rules (2026)

Purchase Price	Minimum Down Payment	Rules
Up to $500,000	5%	Standard
$500,001 to $999,999	5% on first $500K + 10% on remainder	Sliding scale
$1,000,000 to $1,499,999	5% on first $500K + 10% on remainder	Effective rate ≈ 7.5–9.9%
$1,500,000+	20% minimum	Not eligible for insured mortgage

Example: $700,000 purchase

First $500,000 × 5% = $25,000
Remaining $200,000 × 10% = $20,000
Minimum down payment = $45,000 (6.43%)

Provincial Sales Tax on CMHC Premiums

The CMHC premium is added to your mortgage balance (no upfront payment for the premium itself). However, the PST/QST on the premium must be paid upfront and is not added to the mortgage:

Province	Tax on CMHC Premium	Notes
Ontario	8% PST	Paid at closing
Quebec	9% QST	Paid at closing
Manitoba	8% RST	Paid at closing
All other provinces	0%	No provincial tax on the premium

Example: Ontario buyer, $22,800 CMHC premium:

Provincial tax: $22,800 × 8% = $1,824 due at closing
The $22,800 premium itself is added to the mortgage

CMHC vs Sagen vs Canada Guaranty

	CMHC	Sagen	Canada Guaranty
Type	Crown corporation (federal)	Private	Private
Premiums	Identical (OSFI regulated)	Identical	Identical
Portability	Yes	Yes	Yes
Lender choice	Yes	Yes	Yes
Borrower choice	No — lender decides	No	No

All three are regulated by OSFI and offer functionally identical products. The insurer used has no practical impact on your mortgage terms, payments, or recourse in a default. Your lender chooses.

How the Premium Affects Your Mortgage

The premium is added to your mortgage amount and amortized across your payments. You do not pay it upfront (except for the provincial tax portion).

Effect on monthly payment (5% premium, 5.0% rate, 25-year amortization):

Base mortgage	Premium added	Total mortgage	Monthly payment
$570,000	$22,800	$592,800	~$3,455
$570,000	$0 (if 20% down)	$570,000	~$3,323
Extra monthly cost of insurance			~$132/month

The $22,800 premium on a $600,000 purchase adds roughly $132/month to your payment at 5.0% over 25 years.

The “Avoiding CMHC” Math: Is 20% Down Always Better?

The opportunity cost of saving an extra 15% (from 5% down to 20% down) is significant. That extra down payment money could have:

Scenario	$90,000 Extra Saved for Down Payment	Invested Instead
CMHC cost (5% down)	$22,800 added to mortgage	Avoided
Opportunity cost	$0	$90,000 invested × 6% avg for 5 years = ~$120,548

In a rising market: Buying at 5% down with CMHC and gaining equity while the $90,000 is still invested often outperforms waiting. This depends heavily on the market environment.

In a flat or falling market: The CMHC premium is a dead cost; delaying for 20% down may be rational.

Porting an Insured Mortgage

If you sell your home and buy a new one, your insured mortgage can be ported. No new premium is charged on the ported balance. A top-up (new additional amount) does incur a premium on the additional amount. This is a meaningful benefit — preservation of your insured status avoids a new 4% premium on your existing balance.