Use our CMHC calculator to estimate your mortgage loan insurance premium instantly and understand down payment rules, and total costs.
Lei Villar-Cisneros Everything buyers commonly ask about mortgage default insurance, its cost, and how it affects your mortgage.
CMHC insurance — more formally called mortgage default insurance — protects your lender, not you, if you're ever unable to keep up with your mortgage payments. It's required by federal law whenever a buyer puts down less than 20% of the purchase price. The Canada Mortgage and Housing Corporation (CMHC) is the largest provider, alongside two private insurers, Sagen and Canada Guaranty.
Anyone financing a home with less than a 20% down payment — commonly called a high-ratio mortgage. If your down payment is 20% or more, you have a conventional mortgage and don't need this insurance at all.
The premium is a percentage of your mortgage amount, ranging from 0.60% up to 4.00% (or 4.50% if your down payment came from a borrowed source), depending on your loan-to-value ratio — the smaller your down payment, the higher the rate. A longer amortization (beyond 25 years) adds a further 0.20% surcharge.
Even though the insurance protects the lender, the cost is paid entirely by you, the borrower. In most cases it's added directly to your mortgage principal and paid off gradually with your regular payments, rather than as a separate upfront cost.
No, not for your primary residence — the CRA treats it as part of the cost of financing your home rather than a deductible expense. If you're financing a rental or income property, different rules may apply, so it's worth checking with a tax professional for your specific situation.
No — once it's in place, it stays attached to that mortgage for its full life, even after you've built up 20% equity through payments or home value growth. The way to stop paying for it going forward is to refinance once you have 20%+ equity; your new mortgage at that point won't require insurance.
The premium itself is typically rolled into your mortgage — but if you're in Ontario, Quebec, or Saskatchewan, the provincial sales tax charged on that premium is the exception: it must be paid in cash at closing and cannot be added to your loan.
Yes — CMHC offers a premium refund of up to 25% when your mortgage loan insurance is used to finance a home that meets certain energy-efficiency standards. Ask your mortgage advisor whether your purchase qualifies.
All three are approved mortgage default insurers in Canada, and their standard premium rates are the same. The main practical difference shows up in specialty situations — for example, some private insurers offer options for self-employed borrowers or non-traditional down payments that CMHC may handle differently.
Indirectly, yes. Because it shifts the lender's risk to the insurer, lenders are willing to approve buyers with as little as 5% down and can often offer better interest rates on insured mortgages than they would on riskier, uninsured lending. Without it, most buyers would need a much larger down payment to qualify at all.