Mortgage education
CMHC mortgage loan insurance helps lenders offer mortgages to buyers with smaller down payments. It protects the lender, not the borrower, and the premium can materially change the total mortgage amount.
Canada uses a tiered minimum down payment structure. These are planning rules, not a guarantee of approval. Lenders and insurers may apply additional requirements based on credit, income, property type, and debt ratios.
| Purchase price | Minimum down payment | What to verify |
|---|---|---|
| $500,000 or less | 5% of the purchase price | Insurer, lender, income, and credit requirements |
| $500,001 to $1.5 million | 5% of the first $500,000 plus 10% of the remainder | Current insured-mortgage eligibility and stress-test assumptions |
| $1.5 million or more | 20% down payment | Uninsured mortgage rules and lender-specific limits |
Rules can change. Confirm current down payment and mortgage insurance requirements with your lender, broker, lawyer, notary, and official government or insurer sources before making an offer.
Mortgage insurance premiums are commonly calculated as a percentage of the mortgage amount. The higher the loan-to-value ratio, the higher the premium rate is likely to be. The premium may be added to the mortgage, but adding it means you pay interest on that amount.
| Loan-to-value range | Example CMHC premium rate |
|---|---|
| Up to and including 65% | 0.60% |
| 65.01% to 75% | 1.70% |
| 75.01% to 80% | 2.40% |
| 80.01% to 85% | 2.80% |
| 85.01% to 90% | 3.10% |
| 90.01% to 95% | 4.00% |
CMHC mortgage loan insurance generally applies when a buyer has less than 20% down and the mortgage meets insurer and lender rules. Minimum down payment rules are tiered by purchase price, premiums are based on loan-to-value, and the insurance protects the lender rather than the borrower.
The lender pays the mortgage insurance premium to the insurer, but the cost is typically passed on to the borrower. Many borrowers add the premium to the mortgage, which means interest is paid on it over time.
A buyer can usually avoid mortgage loan insurance by making a down payment of at least 20%, subject to lender rules. That lowers the loan-to-value ratio but requires more cash upfront.
Some provinces charge sales tax on mortgage insurance premiums. The tax treatment can vary, so buyers should confirm provincial rules with their lender, broker, lawyer, or notary.
Use our calculator to estimate your monthly payment, check your GDS/TDS ratios, and see an estimated approval probability based on your income, down payment, and other debts.
You can adjust income, down payment, debts, and more to see how your approval chances move.