CMHC Insurance Explained (Canada Mortgage Default Insurance)
By Colson · Reviewed by Abodemic Editorial Standards · Updated June 1, 2026
In Canada, mortgage-default insurance (from CMHC or a private insurer) is required when your down payment is under 20%. The premium is a percentage of your loan that rises as your down payment shrinks, and it's typically added to the loan and paid over the amortization.
What is CMHC insurance?
In Canada, mortgage-default insurance — from CMHC (Canada Mortgage and Housing Corporation) or a private insurer like Sagen or Canada Guaranty — is required when your down payment is under 20%. It protects the lender if you default, and it lets you buy with as little as 5% down. See your payment in the Canada mortgage calculator.
How much does it cost?
The premium is a percentage of your loan that rises as your down payment shrinks (higher loan-to-value = higher premium). It's typically added to your mortgage and paid off over the amortization rather than upfront. A 20%+ down payment avoids it entirely.
Is it worth it?
For many buyers, paying the premium to get into the market sooner beats waiting years to save 20% while prices rise. Weigh the premium against the cost of waiting — and remember Canadian fixed mortgages compound semi-annually, which the calculator handles automatically.