- You need mortgage default insurance whenever your down payment is less than 20% of the price, and it lets you borrow up to 95%.
- CMHC’s premium is 4.00% of the loan with 5% to 9.99% down, 3.10% with 10% to 14.99% down and 2.80% with 15% to 19.99% down.
- Insurance is only available on homes priced below $1,500,000, so homes at or above that price need 20% down.
- Ontario, Quebec and Saskatchewan charge sales tax on the premium, and that tax must be paid in cash, not added to the loan.
Checked October 2026
What mortgage default insurance is
Mortgage default insurance, also called mortgage loan insurance, primary mortgage insurance or CMHC insurance, covers your lender if you stop making payments. CMHC says it plainly: it protects your lender in case you can’t make your payments. It doesn’t pay anything to you or your family.
In return, lenders let you buy with as little as 5% down and offer insured mortgages at rates comparable to those for borrowers with larger down payments. Without it, you would need 20% down.
When you need it
You need it whenever your down payment is less than 20% of the purchase price. Your lender may still ask for it with 20% or more, usually if you’re self-employed or have a poor credit history.
Insurance also sets the floor for your down payment. The minimum depends on the price:
| Purchase price | Minimum down payment | Insurance |
|---|---|---|
| $500,000 or less | 5% of the price | Required |
| $500,000 to $1,500,000 | 5% of the first $500,000 plus 10% of the rest | Required under 20% down |
| $1,500,000 or more | 20% of the price | Not available |
Source: CMHC. The cap rose from $1 million to $1.5 million on December 15, 2024. The price must be below $1,500,000 to insure.
CMHC’s own example is a $760,000 home. Twenty per cent would be $152,000, but with insurance the minimum is 5% of $500,000 plus 10% of $260,000: $25,000 plus $26,000, or $51,000. Our down payment calculator works this out for any price.
Worked example: a $760,000 home in Ontario
- Purchase price: $760,000
- Minimum down payment: $51,000
- Mortgage before insurance: $709,000
- Loan-to-value: 93.29%, so the premium rate is 4.00%
- Premium: $709,000 × 4.00% = $28,360
- Insured mortgage: $737,360
- Ontario sales tax on the premium: 8% of $28,360 = $2,268.80, paid in cash at closing
Now take a $500,000 home with $50,000 down. The loan is $450,000, exactly 90% loan-to-value, so the rate is 3.10% and the premium is $13,950, for a mortgage of $463,950. With a 30-year Home Start amortization the rate is 3.30% and the premium is $14,850. Put $100,000 down and there’s no premium at all.
Is a bigger down payment worth it
Each step up in down payment lowers the rate. Moving from 5% to 10% down drops the premium from 4.00% to 3.10%, and the premium also applies to a smaller loan. But waiting to save more can cost you if prices or rates rise, and money in an FHSA or the Home Buyers’ Plan from your RRSP can help you reach the next band sooner.
Insurance also helps at renewal. Finance Canada says insured mortgage holders can switch lenders at renewal without another stress test. Since November 21, 2024, OSFI gives uninsured borrowers the same break when they switch between federally regulated lenders without adding to the loan or the amortization.
Before you set a budget, get a mortgage pre-approval and compare insured rates on our mortgage rates page.
Frequently Asked Questions
Do I need CMHC insurance with 20% down?
Usually not. Insurance is required when your down payment is less than 20%. A lender can still ask for it if you’re self-employed or have a poor credit history.
How much does CMHC insurance cost?
With a 25-year amortization it’s 4.00% of the loan with 5% to 9.99% down, 3.10% with 10% to 14.99% down and 2.80% with 15% to 19.99% down. Home Start 30-year loans add 0.20 points.
What is primary mortgage insurance in Canada?
It’s another name for mortgage default insurance. It protects your lender if you stop paying and is required when you put down less than 20%.
Is mortgage default insurance a one-time payment?
Yes. The premium is a one-time charge, though most buyers add it to the mortgage and repay it, with interest, over the amortization.
Can I add the CMHC premium to my mortgage?
Yes, you can pay it in a lump sum or add it to your mortgage. Sales tax on the premium in Ontario, Quebec and Saskatchewan can’t be added and must be paid at closing.
What is the minimum down payment in Canada?
5% on the first $500,000 and 10% on the part above it. Homes priced at $1,500,000 or more need 20%, because insurance isn’t available.
What is the maximum price for an insured mortgage?
The price must be below $1,500,000. The cap rose from $1 million on December 15, 2024.
Does mortgage default insurance protect me?
No. It protects the lender. If you want cover that pays off your mortgage when you die, that’s mortgage life insurance or term life insurance, which are separate and optional.
Is CMHC insurance refundable?
Not as such, but portability can credit up to 100% of your premium on a new insured loan within 6 months, and CMHC Eco products refund 25% on energy-efficient homes.
How do I calculate my CMHC premium?
Divide your loan by the price to get the loan-to-value, find its premium rate and multiply that by the loan. Our down payment calculator does it for you.
Try this next
Sources, checked October 2026
- CMHC: What is mortgage loan insurance cmhc-schl.gc.ca
- CMHC: Purchase cmhc-schl.gc.ca
- CMHC: Home Start cmhc-schl.gc.ca
- CMHC: Mortgage loan insurance premiums cmhc-schl.gc.ca
- FCAC: How much you need for a down payment canada.ca
- FCAC: Optional mortgage insurance products canada.ca
- Department of Finance Canada: mortgage reforms (September 2024) canada.ca
- OSFI: Minimum qualifying rate for uninsured mortgages osfi-bsif.gc.ca
General information for Canadians, not financial, tax or legal advice. Rules and menus change, so confirm details with your bank, lender or the Government of Canada. See our methodology.