CMHC Insurance Calculator

Understanding CMHC Mortgage Insurance

Mortgage default insurance (commonly called CMHC insurance) is a mandatory requirement in Canada for any home purchase where the buyer puts down less than 20% of the purchase price. Despite the name, this insurance does not protect the borrower — it protects the lender against losses if the borrower defaults on their mortgage. The requirement enables lenders to offer mortgages with as little as 5% down, which significantly lowers the barrier to homeownership.

Three organizations provide mortgage default insurance in Canada: CMHC (Canada Mortgage and Housing Corporation), which is a federal Crown corporation; Sagen (formerly Genworth Canada), a private insurer; and Canada Guaranty, also a private company. All three use the same premium rate schedule, so the cost to the borrower is identical regardless of which insurer the lender uses. Your lender chooses the provider, not you.

CMHC Premium Rates by Loan-to-Value

The premium is calculated as a percentage of the mortgage amount (not the home price) and is almost always added directly to your mortgage balance. This means you pay interest on the insurance premium over the life of the loan. For a $500,000 home with 5% down, the premium would be 4.00% of $475,000, or $19,000, bringing your total mortgage to $494,000. In some provinces, provincial sales tax (PST) also applies to the insurance premium, adding further cost.

One advantage of an insured mortgage is that lenders typically offer lower interest rates to insured borrowers, since their risk is fully backstopped. The rate difference (often 0.10% to 0.30%) can partially offset the cost of the insurance premium, especially for buyers who plan to stay in the home for many years. Whether to save for 20% down or purchase sooner with insurance is a personal financial decision that depends on local housing market conditions, your savings rate, and how quickly home prices are changing.