CMHC mortgage insurance costs between 0.60% and 4.00% of your loan amount, charged once and added to your mortgage balance rather than paid in cash at closing. Every federally regulated lender in Canada requires it when a buyer’s down payment is under 20% of the purchase price, whether the insurer behind the policy is CMHC, Sagen, or Canada Guaranty. The premium isn’t a flat number. It scales with how much you’re borrowing against the home’s value, so a buyer putting 5% down pays a meaningfully higher rate than one putting down 15%. This guide sets out what the premium costs by loan-to-value band, how it gets added to your mortgage instead of paid at closing, and how it differs from the mortgage life insurance your lender will also try to sell you. For everything else a Toronto purchase involves, see our complete Toronto real estate guide.
Who needs CMHC mortgage insurance
You need mortgage default insurance, usually called CMHC insurance after the largest of the three providers, whenever your down payment is under 20% of the purchase price. That makes your mortgage a “high-ratio” mortgage, and Canada’s banking regulator requires every federally regulated lender, meaning every chartered bank and most credit unions, to have that loan insured before they’ll fund it. Put down 20% or more and you get a conventional, uninsured mortgage instead; the rule stops applying entirely. The insurance protects the lender if you stop paying, not you, but you’re the one who pays for it. As the Financial Consumer Agency of Canada explains, a lender typically picks the insurer on your behalf from one of three providers: CMHC, a federal Crown corporation, or Sagen and Canada Guaranty, both private insurers. You generally don’t get to choose which of the three insures your mortgage; your lender decides.
What the premium costs, by loan-to-value band
CMHC’s own premium schedule, current as of October 2026, prices the insurance as a percentage of your loan amount, not your purchase price, and the rate rises as your loan-to-value ratio climbs. At 65% loan-to-value or less, the premium is 0.60%. From 65.01% up to 75% loan-to-value, it’s 1.70%. From 75.01% up to 80%, it’s 2.40%. From 80.01% up to 85%, the rate is 2.80%. From 85.01% up to 90%, it’s 3.10%. And from 90.01% up to 95%, the maximum loan-to-value CMHC will insure, the rate is 4.00%, or 4.50% if any part of your down payment comes from a non-traditional source, a gift or a borrowed amount, rather than your own savings. A buyer putting down the minimum 5% sits at the top of that scale. Someone putting down 15% sits closer to the middle. The full schedule is published on CMHC’s own site, and Sagen and Canada Guaranty price to match it, covered below.
CMHC also insures mortgages up to $1.5 million, a ceiling the federal government raised from $1 million in December 2024. Above that price, a buyer needs at least 20% down and can’t use mortgage insurance at all, regardless of how much more they could put down. Within the insured range, the minimum down payment itself is tiered: 5% on the first $500,000 of the purchase price, then 10% on the portion between $500,000 and the $1.5 million ceiling. A $700,000 purchase, for instance, needs $25,000 (5% of $500,000) plus $20,000 (10% of $200,000), or $45,000 total, before insurance even enters the picture.
How the premium gets paid
The premium itself doesn’t come out of your pocket at closing. Your lender adds it to your mortgage principal and you repay it, with interest, over your amortization, the same way you repay the rest of what you borrowed. On a $500,000 mortgage at 85% loan-to-value, a 3.10% premium adds $15,500 to your loan balance, not $15,500 you need in cash on closing day. That’s a distinction from land transfer tax and legal fees, which you do pay in cash at closing and which this premium has nothing to do with.
There’s one exception. Ontario, along with Quebec and Saskatchewan, charges provincial sales tax on the mortgage insurance premium itself, and that tax can’t be added to your mortgage. In Ontario the rate is 8%, so on that same $15,500 premium you’d owe roughly $1,240 in cash at closing, on top of your down payment and your other closing costs. It’s a small line item next to the premium itself, but it’s genuinely cash you need on hand, not financing you can roll in.
CMHC insurance is not mortgage life insurance
This is the single most common point of confusion on this topic. CMHC mortgage insurance, and the equivalent Sagen or Canada Guaranty policy, protects your lender if you default on the loan. It isn’t optional once your down payment is under 20%, and no amount of good credit or income changes that. Mortgage life insurance, sometimes called mortgage protection insurance, is a completely different product: an optional policy your lender sells separately that pays off your remaining mortgage balance if you or your co-borrower dies, with a disability add-on that can cover payments if you can’t work due to illness or injury. You can decline mortgage life insurance with no effect on whether your lender will fund the mortgage. You cannot decline mortgage default insurance if your down payment is under 20%. The two get bundled together in conversation, often at the same meeting where you work through mortgage pre-approval, because a lender will usually pitch both at once. They answer different questions: one protects the bank, the other protects your family.
CMHC vs. Sagen vs. Canada Guaranty
Three companies insure high-ratio mortgages in Canada. CMHC is the federal Crown corporation and the oldest and largest of the three. Sagen, formerly Genworth Canada, and Canada Guaranty are both private mortgage insurers operating under the same federal oversight. In practice, their premium schedules are priced to match CMHC’s, band for band, so which insurer ends up on your file generally doesn’t change what you pay. The difference between the three shows up more in underwriting flexibility on edge cases, self-employed income, newcomers to Canada, slightly lower credit scores, than in price. Your lender picks the insurer, usually based on which one approves files like yours most easily, not based on cost to you.
Where this fits with the rest of your financing
Where your down payment comes from matters to the rate itself, not just to your approval. If any portion is gifted rather than saved, your lender will need a signed gift letter for the mortgage confirming it doesn’t need to be repaid. That non-traditional source is exactly what pushes the top loan-to-value band from 4.00% to 4.50%, so a gifted down payment isn’t cost-neutral next to a saved one.
Mortgage insurance isn’t limited to a first purchase, either. If you’re refinancing to add or convert a secondary suite and your resulting loan-to-value climbs back above 80%, the same insurance requirement can apply to that refinance, a detail covered in our guide to secondary suite financing. The premium mechanics are identical either way: a percentage of the loan, scaled to loan-to-value, added to the balance rather than paid in cash.
Frequently asked questions
Who actually needs CMHC mortgage insurance?
Anyone financing a home purchase through a federally regulated lender, meaning any chartered bank or most credit unions, with a down payment under 20% of the purchase price. That 20% threshold is what separates a high-ratio mortgage, which must be insured, from a conventional mortgage, which doesn’t need insurance at all. The requirement applies regardless of your income, credit score, or employment history; it’s based entirely on the size of your down payment relative to the price. CMHC will insure a home up to $1.5 million; above that price, you need at least 20% down and can’t use mortgage insurance regardless of how much more you could put toward it. The insurance itself protects the lender, not you, but as the borrower, you’re the one who pays the premium.
How much does CMHC insurance actually cost?
The premium is a percentage of your loan amount, not your purchase price, and it rises in bands as your loan-to-value ratio increases. At 65% loan-to-value or under, it’s 0.60%. The rate climbs through 1.70%, 2.40%, 2.80%, and 3.10% at higher bands, topping out at 4.00% at 90.01% to 95% loan-to-value, the maximum CMHC insures, or 4.50% if any part of your down payment is gifted or borrowed rather than saved. A buyer putting the minimum 5% down sits at that top band; a buyer putting down 15% lands in the middle of the scale. There’s no single number that applies to every buyer, because the rate depends entirely on how much you’re borrowing against the home’s value.
Is the CMHC premium paid upfront, or added to the mortgage?
It’s added to your mortgage principal and repaid over your amortization period, with interest, rather than paid as a lump sum in cash at closing. A $15,500 premium on a $500,000 mortgage becomes part of what you owe and repay monthly, not a cheque you write on closing day. There’s one exception: Ontario, Quebec, and Saskatchewan apply provincial sales tax directly to the premium itself, and that tax portion can’t be rolled into the mortgage. In Ontario, at 8%, that’s cash you need on hand at closing alongside your down payment and other closing costs, even though the premium it’s calculated on is financed.
Is CMHC insurance the same as mortgage life insurance?
No, and confusing the two is the most common mistake buyers make on this topic. CMHC mortgage insurance, or its Sagen or Canada Guaranty equivalent, protects your lender if you default on the loan, and it’s mandatory whenever your down payment is under 20%. Mortgage life insurance is a separate, optional product your lender sells that pays off your remaining mortgage balance if you or a co-borrower dies, sometimes with an added disability benefit covering payments if you can’t work. You can decline mortgage life insurance without affecting your mortgage approval at all. You cannot decline mortgage default insurance once your down payment falls under the 20% threshold. They’re sold by the same lender, often in the same conversation, but they protect two entirely different parties.
Do Sagen and Canada Guaranty cost the same as CMHC?
Yes, in practice. CMHC, Sagen, and Canada Guaranty are the three providers of mortgage default insurance in Canada, and their premium schedules are priced to match each other band for band across the same loan-to-value tiers. Your lender chooses which of the three insures your specific mortgage, usually based on underwriting fit for your file rather than cost, since the cost to you comes out the same regardless of which one it is. Where the three insurers do differ is in how they handle edge cases on approval, self-employment income, newer credit history, or a recent move to Canada, rather than in what they charge once a file is approved.
Is there a first-time buyer discount on the premium?
No, not on the premium rate itself. CMHC’s shared-equity First-Time Home Buyer Incentive, which did reduce what a buyer needed to borrow, was discontinued at the end of March 2024 and is no longer available. The one feature that currently applies specifically to first-time buyers, alongside buyers of newly built homes, is access to a 30-year insured amortization instead of the usual 25-year maximum, and that comes with a 0.20 percentage point surcharge added to the premium, a cost increase in exchange for lower monthly payments, not a discount. Outside that one amortization option, a first-time buyer pays the same loan-to-value-based premium as anyone else.
Working out what CMHC insurance adds to your numbers is part of knowing what you can actually afford to offer. Start with mortgage pre-approval so your lender can confirm your exact premium band before you’re shopping, then browse current Toronto listings with that number in hand. See the rest of our guides for everything else a Toronto purchase involves.