Insights
CMHC Mortgage Insurance Explained: When You Pay and How Much (2026)
If you buy a home in Canada with a down payment under 20%, you almost always have to pay mortgage default insurance — commonly called CMHC insurance after the Canada Mortgage and Housing Corporation (private insurers Sagen and Canada Guaranty offer it too). It protects the lender if you default, not you, but it’s what lets buyers get in with a smaller down payment. You can estimate it in the Canadian mortgage calculator.
When do you pay it?
CMHC insurance is mandatory whenever your down payment is less than 20% of the purchase price (a loan-to-value above 80%). At 20% down or more, you don’t pay it at all. The minimum down payment in Canada is 5% on the first $500,000 of the price and 10% on the portion above, with homes over $1,000,000 requiring 20% — which means those buyers never pay CMHC insurance.
How much does it cost?
The premium is a percentage of your mortgage that rises as your down payment shrinks:
| Down payment | Premium (% of loan) |
|---|---|
| 20% or more | 0% (no insurance) |
| 15% to under 20% | ~2.8% |
| 10% to under 15% | ~3.1% |
| 5% to under 10% | ~4.0% |
The premium is usually added to your mortgage and paid off over the amortization, so it increases both your loan and your monthly payment. On a $500,000 mortgage at 5% down, a ~4% premium is about $20,000 added to the loan.
How to avoid or reduce it
The only way to avoid CMHC insurance entirely is a down payment of 20% or more. If that’s out of reach, a larger down payment within the insured range still lowers the premium (e.g. 15% down costs less than 5% down). Try different down payments in the calculator to see the trade-off.
FAQ
Is CMHC insurance the same as mortgage life insurance? No. CMHC (default) insurance protects the lender if you stop paying. Mortgage life insurance is a separate, optional product that pays off your mortgage if you die.
Can I get the premium back? No, it’s a one-time cost (though a partial refund exists for some energy-efficient homes). It is not refundable if you sell or refinance.
Does 20% down always avoid it? Yes — at 20% or more down, no mortgage default insurance is required, and you also unlock longer amortizations.