If you buy a home in Canada with less than 20% down, your mortgage must carry mortgage default insurance. Most people call it “CMHC insurance” after the Crown corporation, though Sagen and Canada Guaranty sell it too, at the same standard rates.
Who needs it
Any mortgage from a federally regulated lender with a loan-to-value above 80%. The insurance protects the lender, not you, but it’s what lets you buy with as little as 5% down, and insured mortgages often get the lowest rates.
2026 premium rates
| Down payment | Premium (% of the loan) |
|---|---|
| 5% – 9.99% | 4.00% |
| 10% – 14.99% | 3.10% |
| 15% – 19.99% | 2.80% |
| 20%+ | None |
A 30-year amortization (allowed with insurance only for first-time buyers and new builds since December 15, 2024) adds 0.20%.
How you pay it
The premium is added to your mortgage. With $65,000 down on a $650,000 home, the $585,000 loan carries a 3.10% premium of $18,135, so you borrow $603,135. You pay interest on the premium for the whole amortization, so the true cost is higher than the sticker.
In Ontario (8%), Quebec (9%) and Saskatchewan (6%), provincial sales tax applies to the premium and must be paid in cash at closing. In the example, that’s $1,450.80 in Ontario.
Eligibility limits
- Purchase price under $1.5 million (raised from $1 million on December 15, 2024).
- Maximum 25-year amortization, or 30 years for first-time buyers and new builds.
- You must pass the stress test and the GDS/TDS limits of 39% and 44%.
- Owner-occupied homes of 1 to 4 units.
Should you wait to save 20%?
Avoiding an $18,000 premium sounds attractive, but saving another $65,000 can take years, during which prices and rents change. Many buyers do better putting 10% down now. Run both scenarios in the CMHC calculator: the table shows the premium at each down payment.