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01 Overview

What is CMHC Mortgage Insurance?

CMHC mortgage default insurance (also called mortgage loan insurance or CMHC insurance) is a type of insurance required by Canadian law when a homebuyer's down payment is less than 20% of the purchase price. It protects the lender — not the buyer — in the event of mortgage default.

Despite protecting the lender, the premium is paid entirely by the borrower. It can be added to the mortgage principal and paid off over the life of the amortization period, or paid upfront as a lump sum.

Three approved insurers in Canada CMHC is the largest and government-backed insurer. Two private alternatives also exist: Sagen (formerly Genworth Canada) and Canada Guaranty. All three charge the same premium rates under federal regulations.
Why does it exist? Mortgage insurance allows lenders to offer competitive interest rates to buyers with smaller down payments without taking on excessive risk. It also expands homeownership access to Canadians who haven't saved a 20% down payment.
02 Requirements

Who Needs CMHC Insurance?

CMHC insurance is mandatory in Canada when all of the following apply:

Insurance Required When…
  • Down payment is 5–19.99% of purchase price
  • Property purchase price is $1.5M or less
  • Property is in Canada
  • Property is 1–4 units
  • One unit must be owner-occupied
  • Amortization is 25 years or less (standard)
Insurance NOT Required When…
  • Down payment is 20% or more
  • Purchase price exceeds $1,500,000
  • Property has 5 or more units
  • Purchase is for investment only (no owner-occupancy)
  • Refinancing (CMHC doesn't cover refinances)
Minimum 5% down payment required As of current regulations, the absolute minimum down payment for any insured mortgage in Canada is 5% of the first $500,000, plus 10% on any portion between $500,000 and $999,999. Properties priced at $1,000,000 or more require a minimum 20% down and are not eligible for CMHC insurance.
03 Rates

CMHC Premium Rates 2026

The premium is calculated as a percentage of the total loan amount (not the purchase price). The rate depends on your loan-to-value (LTV) ratio — the lower your down payment, the higher the premium.

Down Payment Loan-to-Value (LTV) Premium Rate Risk Level Example ($500K home)
5% – 9.99% 90.01% – 95% 4.00% Highest $19,000 premium on $475K loan
10% – 14.99% 85.01% – 90% 3.10% Moderate $13,950 premium on $450K loan
15% – 19.99% 80.01% – 85% 2.80% Moderate $11,900 premium on $425K loan
20% or more 80% or less None None No premium required
Provincial Sales Tax (PST) on premiums In Ontario, Manitoba, and Quebec, provincial sales tax is applied to the CMHC premium itself. This PST cannot be added to the mortgage — it must be paid upfront at closing. Ontario: 8% PST · Manitoba: 7% PST · Quebec: 9% QST.
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05 Eligibility

Full Eligibility Requirements

To qualify for a CMHC-insured mortgage, both the property and the borrower must meet the following conditions:

  • Property must be in Canada CMHC only covers properties located within Canada. Foreign properties do not qualify.
  • Purchase price ≤ $1,500,000 As of December 2024, the insured mortgage limit was raised from $1M to $1.5M to reflect rising home prices across Canada.
  • Minimum 5% down payment On the first $500K. An additional 10% is required on the portion between $500K–$999,999. Properties $1M–$1.5M now require only 20% down without needing insurance (or 5% under new first-time buyer rules).
  • Amortization period ≤ 25 years (30 for eligible buyers) Standard insured mortgages max out at 25 years. In 2024, first-time buyers of new builds can access 30-year insured mortgages.
  • 1–4 unit residential property Must be owner-occupied. At least one unit must be your principal residence. Rental-only properties do not qualify.
  • Qualifying income and credit Your lender will still assess your Gross Debt Service (GDS) ratio (≤39%) and Total Debt Service (TDS) ratio (≤44%), plus a minimum credit score of 600.
  • Refinancing is not covered CMHC does not insure mortgage refinances. Insurance only applies to original purchase transactions.
  • Properties over $1.5M are excluded High-value properties require a conventional uninsured mortgage with a minimum 20% down payment.
06 Rule Changes

2024 Rule Changes You Need to Know

The Canadian government announced two major changes to CMHC mortgage rules in 2024, taking effect December 15, 2024. These are the most significant mortgage rule updates in over a decade.

Change 1: Insured mortgage limit raised from $1M to $1.5M For the first time since 2012, the maximum purchase price eligible for CMHC insurance was raised to $1,500,000. This allows buyers in expensive markets like Toronto and Vancouver to access insured mortgages on more properties with less than 20% down.
Change 2: 30-year amortization for eligible buyers First-time homebuyers purchasing new construction properties can now access 30-year insured mortgages (up from 25 years). This reduces monthly payments, improving short-term affordability — though more interest is paid over the life of the loan.
Who qualifies for the 30-year amortization? You must be a first-time homebuyer (or someone who hasn't owned a home in the last 4 years), purchasing a newly built home. Resale properties and non-first-time buyers remain capped at 25-year insured amortization.
07 Process

How to Apply for CMHC Insurance

You don't apply to CMHC directly. The insurance application is submitted by your lender on your behalf as part of the mortgage approval process.

  1. 1
    Get mortgage pre-approval from a lender
    Your lender (bank, credit union, or mortgage broker) will assess your income, credit score, down payment, and GDS/TDS ratios. They'll tell you how much you qualify for and whether CMHC insurance applies.
  2. 2
    Make a purchase offer and get it accepted
    Once you find a property and have a signed Agreement of Purchase and Sale, bring it to your lender to finalize the mortgage application.
  3. 3
    Lender submits to CMHC on your behalf
    Your lender sends the mortgage application, property details, and supporting documents to CMHC (or Sagen / Canada Guaranty). CMHC reviews and issues a commitment letter within a few business days.
  4. 4
    Premium added to your mortgage
    If approved, the CMHC premium is added to your mortgage principal. You'll begin paying it off as part of your regular mortgage payments over your amortization period. PST (if applicable) is due at closing.
  5. 5
    Close the purchase and receive your keys
    Your lawyer finalizes the transaction, registers the mortgage, and on closing day you receive the keys. The insured mortgage is now in effect.
08 FAQ

Frequently Asked Questions

Yes. A down payment of 20% or more means your mortgage is "conventional" (uninsured), and CMHC insurance is not required. You'll need to undergo a separate stress test at the higher of your contract rate or 5.25%, but no insurance premium applies.
No. The CMHC premium is non-refundable, even if you pay off your mortgage in full before the end of the amortization period. However, you only pay interest on the remaining balance, so paying down your mortgage faster does reduce the total interest cost on the insured portion.
Yes — in most cases. If you transfer your mortgage to a new lender at renewal and your loan amount remains the same or decreases, no new insurance premium is charged. The original insurance coverage transfers. If you increase your mortgage amount, a new premium may apply on the additional amount.
The minimum credit score for a CMHC-insured mortgage is 600. However, most lenders prefer a score of 680 or higher for the best rates. A score below 600 typically makes you ineligible for insured mortgages, requiring a larger down payment or alternative lending arrangements.
Yes, gifted funds from an immediate family member (parent, sibling, spouse) are generally acceptable for the down payment on a CMHC-insured mortgage. You'll need a signed gift letter confirming the funds are a gift — not a loan. The donor should not expect repayment.
No. CMHC mortgage default insurance protects your lender, not you. If you lose your job and can't make payments, it's the lender — not you — who is protected. You are still responsible for the mortgage. Consider purchasing separate mortgage protection or life/disability insurance for personal coverage.
Adding the CMHC premium to your mortgage principal increases your loan balance, which in turn increases your monthly payment slightly. For example, a $475,000 loan with a 4% CMHC premium adds $19,000 to your principal — resulting in roughly $100–$115 extra per month on a 25-year amortization at 5.5%.
09 Glossary

Key Terms Explained

Quick reference for the mortgage and CMHC terminology used throughout this guide.

LTV — Loan-to-Value
The ratio of your mortgage amount to the property's purchase price. 5% down = 95% LTV. Higher LTV means higher risk and higher CMHC premiums.
GDS — Gross Debt Service Ratio
Your housing costs (mortgage, taxes, heat, 50% of condo fees) divided by gross income. Must be ≤39% for CMHC-insured mortgages.
TDS — Total Debt Service Ratio
GDS plus all other debt payments (car loans, credit cards, student loans) divided by gross income. Must be ≤44% for insured mortgages.
Stress Test
A federal requirement to qualify at the higher of your contract rate + 2%, or 5.25%. Applied to both insured and uninsured mortgages.
Amortization
The total length of time to pay off your mortgage (e.g. 25 years). Longer amortization = lower monthly payments but more total interest paid.
Mortgage Term
The length of your current rate agreement (typically 1–5 years). Different from amortization — you renew multiple times over the life of the mortgage.
Conventional Mortgage
A mortgage with 20% or more down payment. No CMHC insurance required. Also called an "uninsured" or "traditional" mortgage.
PST on Premium
Provincial sales tax charged on the CMHC premium in Ontario (8%), Manitoba (7%), and Quebec (9%). Must be paid upfront at closing — cannot be added to the mortgage.
Principal Residence
The home you primarily live in. CMHC insurance requires at least one unit of the insured property to be your principal residence.
Sagen / Canada Guaranty
Private mortgage insurers regulated by OSFI. They offer the same premium rates as CMHC and are accepted by most lenders as alternatives.

This guide is for informational purposes only and does not constitute financial or legal advice. CMHC rules may change — always verify with CMHC.ca or a licensed mortgage professional.