Mortgage Disability Insurance in Canada

This Page's Content Was Last Updated: October 31, 2023
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What You Should Know

  • Mortgage disability insurance covers your mortgage payments if you become disabled and can’t work.
  • You aren’t required to purchase mortgage disability insurance in order to be approved for a mortgage.
  • In most cases, there is a waiting period of 60 days before you can start receiving benefits, and the maximum coverage is $3,000 to $3,500 per month for 24 months.
  • The cost varies by provider and your age, and can range from $1.35 per $100 of coverage to as high as $6.93 per $100 of coverage per month.

Mortgage disability insurance is a type of insurance that covers some or all of your mortgage payments for a certain period of time if you become disabled and can’t work. This type of insurance is often offered by lenders as an added protection for borrowers, but it is not required in order to get a mortgage.

We often hear about the importance of having insurance. We’re told that we need health insurance, life insurance, car insurance, and home insurance. But what about mortgage disability insurance? What exactly is it? And do you really need it? Keep reading to find out everything you need to know about mortgage disability insurance in Canada.

Mortgage Disability Insurance Calculator

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Monthly Mortgage Disability Insurance Premium Cost

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Note: These are estimated premiums only. Your premium may vary.

What is Mortgage Disability Insurance?

Mortgage disability insurance covers you in the event that you become disabled and are unable to work. This type of insurance can help to make sure that your mortgage payments are made even if you temporarily lose your income. This can give you peace of mind, knowing that your home will not be at risk if you become disabled. Except for TD, all major Canadian lenders offer optional mortgage disability insurance to their mortgage clients.

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How Much Does Disability Insurance on a Mortgage Cover?

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Mortgage disability insurance can cover up to 100% of your regular mortgage payment. This includes the principal and interest payments, and may also include property tax payments included in your regular mortgage payment as well as mortgage life insurance premiums.

You can choose the coverage amount. For example, you might only need 50% of your mortgage payments to be covered. This reduces your monthly insurance premiums.

Lenders and insurers will have a coverage limit. For example, the maximum coverage might be up to $3,000 per month for 24 months. Manulife covers up to $10,000 per month for up to 24 months. If your regular mortgage payment is over this maximum coverage limit, you’ll still have to pay the leftover amount.

Maximum Mortgage Disability Insurance Coverage

Maximum BenefitMaximum Months Payable
rbc logoRBC
$3,000/month24 months
scotiabank logoScotiabank
$3,500/month24 months
bmo logoBMO
$3,000/month24 months
cibc logoCIBC
$3,000/month24 months

Am I Eligible for Mortgage Disability Insurance?

mortgage disability insurance infographic

In order to be able to purchase mortgage disability insurance, you'll need to be a Canadian resident between the ages of 18 and 64. You'll also need to be either the borrower, co-borrower, or guarantor of the mortgage.

Most lenders that offer mortgage disability insurance require you to be employed full-time, or be self-employed or have seasonal employment. This means that part-time workers might not be eligible for mortgage disability insurance. Some lenders state that you need to work at least 25 hours per week to be eligible, or if you’re a seasonal worker, then that you’ve worked at least one previous season.

There is an upper age limit for mortgage disability insurance. Once you pass this limit, your insurance coverage will end. For example, coverage with CIBC ends once you turn 65.

You may also need to answer a health questionnaire or complete a health assessment. This depends on your answers to your lender's initial health questions, as well as the coverage benefit amount that you are looking to apply for. Some things could make you ineligible for mortgage disability insurance, such as having certain pre-existing health conditions.

Is there a waiting period?

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There is a waiting period before benefits are payable. This waiting period is usually 60 days from the date of disability. This means that you must be disabled and out of work for at least 60 days before your mortgage disability insurance starts covering your mortgage payments.

For example, let’s say that you had a workplace accident on January 1. If you are still injured and not working, then you may be eligible to receive insurance benefits starting March 1. Between January 1 and March 1, you will still need to make the full amount of your mortgage payments. However, your lender may allow you to temporarily defer payments if you have previously made mortgage prepayments.

If you return to work before the waiting period ends, then you will not receive any money from your disability insurance. Using the same example, if you return to work in February, you will not receive any benefits, even though you were out of work for one month.

Comparing Mortgage Disability Insurance Premiums by Lender

Cost per $100 of coverage per month
rbc logoRBC
scotiabank logoScotiabank
bmo logoBMO
cibc logoCIBC

Note: These are estimated premiums only. Your premium may vary.

*RBC’s age brackets differ: 18-30, 31-36, 37-41, 42-45, and 61-65

How Much Does Mortgage Disability Insurance Cost?

Among major banks, CIBC has the lowest premium rates for those aged 18 to 50, at a cost as low as $1.35 per $100 of coverage for a borrower aged 18-29. Scotiabank then has the lowest mortgage disability insurance rates for those aged 51 to 69. This means that a borrower aged 18-29 with a $2,000 mortgage payment would have a monthly insurance cost of $27.00. In comparison, someone aged 60 with CIBC would have a monthly insurance cost of $110.00.

The cost of mortgage disability insurance will vary depending on a number of factors, including the amount of coverage you need and your age. Even though you can often only purchase mortgage disability insurance from your lender if it is a major bank, it’s still a good idea to know what goes into the pricing of your insurance and compare rates. Here's a look at some of the things that can affect the cost of mortgage disability insurance.

The Amount of Coverage You Need

One of the biggest factors in how much your mortgage disability insurance will cost is the amount of coverage you need. The more coverage you need, the more expensive your policy will be. How much coverage you need depends on a number of factors, including your mortgage balance and your financial situation. For example, you might not need to have 100% of your mortgage payments to be covered by insurance if you have significant savings in a savings account already for a rainy day. It's important to make sure you have enough coverage to cover your mortgage in the event you can't work, but you don't want to pay for more coverage than you need.

Your Age

The second major factor that affects the cost of your mortgage disability insurance is your age. The younger you are, the lower your premiums. The older you are, the higher your premiums. For example, someone aged 60 might have a premium rate that is four times higher than someone aged 30!

Type of Policy

The type of policy you choose can also affect the cost of your mortgage disability insurance. If you add-on other coverage options, such as for critical illness insurance, then your premium will be higher. The same goes for if you want to add in mortgage life insurance to cover your death.

Some lenders may offer a discount for bundling together mortgage insurance policies. For example, Scotiabank offers a discount of 10% if you have two mortgage insurance policies, such as a mortgage life insurance policy and a mortgage disability insurance policy.

When Are Mortgage Disability Insurance Benefits Payable?

The common definition for a disability is an injury or illness that prevents you from working. Disability insurance pays out if you are completely unable to work for at least two months due to that injury or sickness. This might include car accidents, heart attacks, and debilitating diseases.

Mortgage Disability Insurance Premium Calculation

Mortgage disability insurance premiums are based on a rate per $100 of coverage. This is known as your fixed monthly benefit amount, which is rounded to the nearest $100. For example, if your monthly mortgage payment is $1,385, then your fixed monthly benefit amount when calculating for the cost of insurance would be $1,400.

Using this same example, your monthly premium is:

That would be $1,400/100, or 14, multiplied by the premium rate. For someone aged 50 with CIBC, the premium rate is $4.45. That means the monthly premium would be 14 x $4.45, or $62.30. You can refer to the premiums table above to find your premium rate with your lender, or use the mortgage disability insurance calculator on this page.

Job Loss Coverage

There are other types of mortgage insurance, such as mortgage life insurance, critical illness insurance, and job loss insurance. With job loss coverage, you'll also pay a separate monthly premium per $100 of coverage. However, unlike critical illness or disability premiums, the premiums for job loss coverage decreases the older you are!

What Disabilities Are Not Covered?

Be sure to read your insurance contract carefully to see what is not covered. Some types of disabilities that are not covered by most policies include disabilities directly or indirectly caused by:

  • Pregnancy
  • Alcohol or drug abuse
  • Intentional self-inflicted injuries
  • Injuries sustained while engaging in illegal activities
  • Experimental or elective cosmetic surgery or treatment
  • War or civil disorder

Other Mortgage Disability Insurance Providers

You do not have to purchase mortgage disability insurance from your lender. Instead, you can choose to purchase it from a third-party insurance company.

manulife logo


Mortgage Guard by Co-operators is a mortgage protection insurance plan that allows you to add-on disability and critical illness protection. A unique feature that co-operators offer is that their disability insurance can cover up to 125% of your monthly mortgage payment, up to $3,500 per month, for up to 60 months! That's much higher than the 100% maximum of the major banks, which also have a cap at 24 months of benefit payments.

manulife logo


Manulife offers one of the largest coverage options for mortgage disability insurance, with coverage up to $10,000 per month for 24 months. Manulife also offers a 60-day review period where you can cancel and get a full refund of any premiums paid. That's longer than the 30-day review period offered by most major banks.

Limits of Mortgage Disability Insurance

LenderMaximum Monthly Payment CoverageMaximum Months of BenefitsWaiting Period
Scotiabank LogoScotiabank$3,500/month24 months60 days
RBC LogoRBC$3,000/month24 months60 days
CIBC LogoCIBC$3,000/month24 months60 days
BMO LogoBMO$3,000/month24 months30 days
First National LogoNational Bank$3,000/month24 months60 days
HSBC LogoHSBC$4,000/month24 months60 days
MCAP LogoMCAP$4,000/month24 months60 days
First National LogoFirst National$10,000/month24 months60 days

Mortgage Critical Illness Insurance

Mortgage critical illness insurance provides a benefit if you suffer a life-threatening illness, such as cancer, heart attack, or stroke. Critical illness insurance usually has a smaller coverage benefit, and it has slightly higher premiums compared with mortgage life insurance. Some policies might not cover pre-existing conditions up to 24 months before the start of your coverage. You might also need to complete a health interview.

Mortgage Critical Illness Insurance - Maximum Coverage for different Lenders and Insurers

LenderInsurerMaximum Coverage
TD LogoTDCanada Life Assurance Company$1,000,000
Scotiabank LogoScotiabankCanada Life Assurance Company$500,000
RBC LogoRBCCanada Life Assurance Company$300,000
CIBC LogoCIBCCanada Life Assurance Company$500,000
BMO LogoBMOSun Life Assurance Company of Canada$450,000
First National LogoNational BankNational Bank Life Insurance Company$150,000

Similar to mortgage life insurance, your cost of critical illness insurance is based on the insured mortgage balance. For example, if your premium rate is $0.45 per $1,000 of mortgage balance, and your mortgage balance is $500,000, then your cost of disability insurance for your full mortgage balance will be $225 per month.

If your maximum coverage amount is less than your mortgage balance, then your mortgage balance is only partially covered. Once your mortgage balance falls below the maximum coverage amount, then your mortgage balance will begin to be fully covered.

For example, the National Bank’s critical illness insurance has a maximum coverage of $150,000. If you have a mortgage balance of $500,000, your insured amount is $150,000. You are only charged insurance premiums on the insured amount of $150,000, not your full mortgage balance of $500,000. Your insured amount will decrease as your mortgage balance decreases.

Insurance benefits and payouts are not taxable. This means that if you are eligible for a critical illness claim and your insured amount was $150,000, then a maximum of $150,000 will go towards paying down your mortgage balance.

Mortgage Critical Illness Insurance Premiums - Major Banks

Monthly Premium per $1,000 of Mortgage Balance

18 to 30$0.14$0.10*$0.16$0.10$0.09*
31 to 35$0.19$0.17*$0.21$0.16$0.13*
36 to 40$0.26$0.27$0.30$0.24$0.20
41 to 45$0.45$0.45$0.50$0.44$0.41
46 to 50$0.69$0.68$0.73$0.66$0.66
51 to 55$1.02$1.01$1.07$0.99$1.02
56 to 60$1.82**$1.65$1.88$1.66**-
61 to 65$2.32**$2.40$2.25$2.49**-
66 to 69$2.65**$2.70-$2.79**-

Premiums last updated in July 2022

*CIBC and BMO have different age brackets of 18-29 and 30-35

**Only available for clients with prior coverage recognition or ROPC. This means you’ll need to have an existing insured mortgage with the lender.”

The calculators and content on this page are provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.