CMHC Mortgage Insurance: Complete Guide for Canadian Brokers (2026)
Everything mortgage brokers need to know about CMHC default insurance: eligibility rules, premium calculations, lender requirements, and how to match insured deals to the right lenders.
What Is CMHC Mortgage Insurance?
CMHC (Canada Mortgage and Housing Corporation) provides mortgage default insurance to lenders when borrowers have less than 20% down payment. This insurance guarantees the lender will be repaid even if the borrower defaults.
Key insight: CMHC insurance protects the LENDER, not the borrower. The borrower pays the premium but gets the benefit of lender willingness to offer high-LTV mortgages at A-lender rates.
Two other approved insurers exist alongside CMHC: Sagen (formerly Genworth Canada) and Canada Guaranty. All three operate under the same National Housing Act rules.
When Is CMHC Insurance Required?
CMHC insurance is mandatory when: • Down payment is less than 20% of purchase price (LTV > 80%) • Property is owner-occupied residential (1-4 units) • Purchase price is ≤ $1,500,000
CMHC insurance is NOT available for: • Refinances (max 80% LTV applies to all refinances) • Investment/rental properties • Properties over $1,500,000 • Amortizations over 30 years (25yr is standard; 30yr available for some) • Non-owner-occupied properties
CMHC Premium Schedule (2026)
The premium is calculated as a percentage of the insured mortgage amount, then added to the mortgage balance.
| LTV Range | Premium Rate | Example ($500K Mortgage) |
|---|---|---|
| 80.01% – 85.00% | 2.80% | $14,000 |
| 85.01% – 90.00% | 3.10% | $15,500 |
| 90.01% – 95.00% | 4.00% | $20,000 |
| 90.01% – 95.00% (short term) | 4.50% | $22,500 |
Amortization Surcharge
A +0.20% surcharge applies when the amortization period exceeds 25 years: • 25yr amortization: Standard premium rates above • 26-30yr amortization: Add 0.20% to base premium
Example: 90% LTV with 30yr amortization: 4.00% + 0.20% = 4.20% premium
PST on CMHC Premiums
Provincial sales tax applies to the CMHC premium in four provinces: • Ontario: 8% PST • Quebec: 9% QST • Manitoba: 7% PST • Saskatchewan: 6% PST
PST must be paid upfront at closing — it cannot be added to the insured mortgage. This is an often-overlooked closing cost.
| Province | PST Rate | PST on $15,500 Premium |
|---|---|---|
| Ontario | 8% | $1,240 |
| Quebec | 9% | $1,395 |
| Manitoba | 7% | $1,085 |
| Saskatchewan | 6% | $930 |
| Other provinces | 0% | $0 |
CMHC Eligibility Requirements
To qualify for CMHC insurance: • Minimum credit score: 600 (many lenders require 680+) • Maximum GDS: 39% (at qualifying rate) • Maximum TDS: 44% (at qualifying rate) • Property must be owner-occupied as primary residence • Property must be in Canada • Borrower must be a Canadian citizen, permanent resident, or have valid work permit • Property purchase price ≤ $1,500,000 (updated December 2024) • Maximum amortization: 25 years (30yr allowed for some properties under $1M)
Down Payment Sources for Insured Mortgages
CMHC-approved down payment sources: • Personal savings (chequing/savings accounts, 90-day history required) • RRSP Home Buyers' Plan withdrawal (up to $35,000/person) • First Home Savings Account (FHSA) withdrawal • Gift from immediate family member (gift letter required, not a loan) • Proceeds from sale of another property
NOT acceptable: • Borrowed funds from unsecured loans or credit cards • Cash (without documented source)
Lender Requirements for Insured Deals
Not all lenders offer insured mortgage programs. CMHC-approved lenders must: • Be federally or provincially regulated financial institutions • Hold an approved lender status from CMHC/Sagen/Canada Guaranty • Follow CMHC underwriting guidelines
BIPS automatically filters lenders to show only those with insured programs for deals requiring CMHC.
Frequently Asked Questions
Can you get CMHC insurance on a rental property?
No. CMHC insurance is only available for owner-occupied residential properties (where the borrower lives as their primary residence). Investment/rental properties require a minimum 20% down payment.
Is CMHC insurance refundable if you sell the house?
No. The CMHC premium is non-refundable. However, if you port the mortgage to a new property, the insurance follows the mortgage and a new premium is only charged on the difference (if the mortgage increases).
What is the maximum purchase price for CMHC insurance in 2026?
As of December 2024, the maximum insurable purchase price is $1,500,000. Properties above this threshold require a minimum 20% down payment and are not eligible for CMHC insurance.
What credit score is needed for CMHC insurance?
CMHC requires a minimum 600 credit score, but many lenders who offer insured programs require 680+. The lender's credit requirement may be stricter than CMHC's minimum.
How does CMHC insurance affect the interest rate?
Counterintuitively, insured mortgages often have LOWER interest rates than conventional mortgages. Because CMHC guarantees repayment, lenders face less risk and offer better rates. The premium cost is offset by the lower rate over a 25-year amortization in many cases.
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