Mortgage Default Insurance in Canada

WOWA® Simply Know Your Options

In Canada, mortgages with a down payment of less than 20% are required to have mortgage default insurance. This insurance, sometimes called “CMHC insurance,” “mortgage loan insurance,” or even just “mortgage insurance,” can affect your mortgage’s cost and eligibility requirements.

Mortgage default insurance covers your mortgage lender should you default on your mortgage. If you cannot repay your mortgage, then mortgage default insurance protects your lender from losses. Mortgage default insurance does not protect you or help you make mortgage payments.

Mortgage default insurance is often associated with the Canada Mortgage and Housing Corporation (CMHC), the federal Crown corporation that insures a significant share of mortgages in Canada. However, CMHC is not the only provider; private mortgage default insurers are also available.

Private mortgage insurers Sagen and Canada Guaranty also provide mortgage default insurance in Canada. Based on insurance-in-force across all segments as of December 31, 2025, market share was:

• CMHC: 59.0%
• Sagen: 24.1%
• Canada Guaranty: 16.9%

One key difference is that CMHC insures multi-unit residential properties in addition to homeowner and portfolio insurance, while private insurers such as Sagen and Canada Guaranty are generally focused on transactional homeowner insurance and portfolio insurance. Looking at insurance-in-force across only transactional homeowner and portfolio segments, the market share was:

• CMHC: 39.6%
• Sagen: 35.5%
• Canada Guaranty: 25%

As a borrower, you might not notice much of a difference between the providers for standard homeowner mortgage default insurance. The borrower requirements and premium rates are generally the same across CMHC, Sagen, and Canada Guaranty.

Mortgages Insured by CMHC in 2025 (by Segments)

*Insurance-in-force is the total outstanding balance of all active insured mortgages that the insurer remains liable for at a given point in time.

Mortgages Insured by Sagen in 2025 (by Segments)

*Insurance-in-force is the total outstanding balance of all active insured mortgages that the insurer remains liable for at a given point in time.

Mortgages Insured by Canada Guaranty in 2025 (by Segments)

*Insurance-in-force is the total outstanding balance of all active insured mortgages that the insurer remains liable for at a given point in time.

The Government of Canada, through the Office of the Superintendent of Financial Institutions (OSFI), requires mortgages with a down payment of less than 20% to have mortgage default insurance. The low down payment means there is a greater risk should the borrower not be able to repay their loan. These types of loans with a loan-to-value above 80% are also called high-ratio mortgages.

The minimum down payment required in Canada is 5% of the purchase price, although this requirement can vary depending on the mortgage and property type. For a typical mortgage, if you’re looking to make a down payment of less than 20%, you will likely need to pay for mortgage default insurance. With an insured mortgage, you can make a down payment of as little as 5%, depending on the purchase price. This helps those who have trouble saving up for a down payment and for those who need down payment assistance.

The table below shows the minimum down payment required based on the home’s purchase price for an insured mortgage in Canada.

Minimum Down Payment by Purchase Price

If you need mortgage default insurance, your mortgage lender will arrange this for you. The most common mortgage insurance provider is the Canada Mortgage and Housing Corporation (CMHC), which is a federal Crown Corporation. However, your lender may also choose to go with a private mortgage default insurance provider. Different providers may have different requirements to be eligible for coverage. You may ask your lender for a preferred insurer if you wish.

When it’s time to pay, your lender will pay the mortgage default insurance premiums to the insurer. The lender will usually pass this cost to you by

• Adding it to your regular mortgage payments, or
• By having you pay it upfront as a lump-sum amount.

If you do add the premium to your mortgage balance, this means that you’ll be paying mortgage interest on the premium for the life of your mortgage. It’s important to note that the cost of mortgage default insurance is non-refundable. This means that if you are required to pay for CMHC insurance but then fully pay off your insured mortgage in a few years, you won’t be able to get a portion of the premiums paid back.

You must meet certain criteria to qualify for mortgage default insurance. While requirements can vary by insurer and lender, CMHC's general eligibility guidelines include:

• Maximum purchase price/lending value of under $1.5 million.
• Credit score of at least 600.
• Maximum gross debt service ratio (GDS) of 39%.
• Maximum total debt service ratio (TDS) of 44%.
• Maximum mortgage amortization of 25 years, or up to 30 years for eligible first-time homebuyers or buyers of newly built homes.
• Down payment can come from traditional sources such as savings, proceeds from selling a property, RRSP withdrawals, or gifts; non-traditional borrowed sources may be allowed in limited cases, subject to insurer rules.

To read about the eligibility requirements in detail, visit our page about CMHC mortgage rules.

The mortgage insurance rates offered by different providers are listed below. You could alternatively use WOWA’s mortgage insurance calculator to calculate your premiums.

CMHC Insurance Rates

CMHC mortgage loan premiums can be as little as 0.60% for mortgages with an LTV of 65% or less; or as high as 4.00% of the total loan amount for LTVs of 90.01% to 95%. This means that if you make a down payment of 5%, you'll need to pay 4% of the mortgage amount for CMHC insurance!

The premium rates chart below shows the current CMHC insurance rates as of June 2026.

CMHC Mortgage Loan Insurance Premium

Updated June 2026

Source: CMHC

The table below shows an example of the required down payment and the CMHC premium cost for a $500,000 insured mortgage, based on the upper end of each premium rate range.

Example of CMHC Premiums ($500,000 Purchase Price)

Ontario, Quebec, and Saskatchewan borrowers must pay provincial sales tax on their CMHC insurance premiums. This sales tax will need to be paid upfront and cannot be added to your regular mortgage payment.

A premium refund of up to 25% may be available when CMHC Mortgage Loan Insurance is used to finance an energy-efficient home.

The premiums earned by CMHC in 2025 are listed in the table below.

Premiums Reported by CMHC in 2025

Source: CMHC annual and quarterly financial reports

Sagen Insurance Rates

Sagen (formerly Genworth Canada) mortgage insurance rates for standard mortgages are the same as CMHC insurance rates. Sagen also offers mortgage insurance for self-employed mortgages, second mortgages, investment properties, and even mortgages with a borrowed down payment! Sagen mortgage insurance premiums for these alternative mortgage types are shown below, with rates current as of June 2026.

Sagen Alternative Mortgage Insurance Rates

Updated June 2026

Source: Sagen

*Percentage of Combined 1st and 2nd Loan Amounts

An additional 0.20% premium may apply for eligible amortizations over 25 years, up to 30 years.

The premiums earned by Sagen in 2025 are listed in the table below.

Premiums Reported by Sagen in 2025

Source: Sagen annual and quarterly financial reports

Canada Guaranty Insurance Rates

Canada Guaranty is a private mortgage insurer that provides mortgage default insurance for conventional mortgages, rental property mortgages, second mortgages, and other mortgage types. The premium rates for standard mortgages are the same as CMHC. The premium rates for alternative mortgages are listed below.

Canada Guaranty Alternative Mortgage Insurance Rates

Updated June 2026

Source: Canada Guaranty

Advantages

• Smaller down payment: Default insurance allows you to make a smaller down payment, making homeownership more accessible to borrowers.
• Higher approval chances: Since the mortgage is insured, it lowers the risk to lenders, due to which they approve borrowers they wouldn't have otherwise, increasing the chances of approval for many buyers.
• Lower interest rates: Mortgage lenders tend to offer lower interest rates for high-ratio-insured mortgages due to the lower risk, which may reduce the overall cost of borrowing despite the added cost of insurance premiums.
• Flexible premium payment options: The premium payments are usually flexible, meaning you could either pay the entire premium upfront or add it to your monthly mortgage payments.

Disadvantages

• Added insurance cost: The main disadvantage of mortgage default insurance is the cost of insurance premiums. While this is an upfront cost that can be amortized over the life of your mortgage loan, it is still an extra expense that can be avoided by simply making a larger down payment.
• Provincial sales tax: You must also pay an additional provincial sales tax on the insurance premiums in some provinces.
• Additional approval step: The mortgage approval process will include an additional step where you will need to get approval from the insurer.
• Home price limit: Mortgage default insurance isn't available for homes priced $1.5M or more. Since December 15, 2024, this higher cap (up from $1M) helps buyers in expensive markets like Toronto and Vancouver, though home prices in those cities can still exceed $1.5M, meaning some buyers will still need a minimum 20% down payment.
• Less cost-effective for short-term borrowers: Being a one-time fee would also make CMHC premiums relatively more expensive if you plan to pay off your mortgage soon, such as if you're looking to sell your home in the next few years. This can be avoided with mortgage porting if you're getting another mortgage, but may come with additional costs.

Mortgage loan insurance premiums in Canada are a one-time upfront cost, which you must either pay at once or add to your monthly mortgage payment. That's different from private mortgage insurance (PMI) premiums in the United States, which are an annual premium cost. The amount that you’ll pay and the premium rate you’ll be charged are based on the loan-to-value (LTV) ratio of the loan, along with the total loan amount being insured.

The cost of mortgage default insurance in Canada is non-refundable. This means that if you decide to pay off your insured mortgage early, you won’t get any refund on the portion of the premiums paid for the remaining amortization period. That differs from the U.S., where PMI premiums can be removed after reaching an LTV ratio of 80% or less.