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HomeUnderstanding Mortgage Insurance In Canada
Mortgage default insurance (CMHC, Sagen, Canada Guaranty) is mandatory with down payments under 20%.
Premiums can add tens of thousands to your mortgage if not managed carefully.
Avoiding insurance is possible with 20% down, gifted funds, or creative structuring.
First-time buyers may still benefit from insured mortgages if it means buying sooner.
Refinancing, portability, and amortization rules all change with insured mortgages.
Your Path to Smarter Home Financing
Mortgage default insurance protects the lender (not you) if you fail to make payments. In Canada, it’s provided by three insurers: CMHC, Sagen, and Canada Guaranty.
Who Needs It?
| Down Payment | Premium % | Example: $600,000 Mortgage |
|---|---|---|
5%–9.99% | 4.00% | $24,000 added |
10%–14.99% | 3.10% | $18,600 added |
15%–19.99% | 2.80% | $16,800 added |
≥20% | 0% | $0 |
Impact on Monthly Payment (25-year amortization @ 5.25%):
👉 That extra $110 adds up to $39,600 over 30 years.
While avoiding premiums is ideal, insured mortgages can have benefits:
Example: Vancouver Condo Buyer
BC-Specific Example:
Mortgage insurance is a reality for many BC buyers. The key is knowing:
Insurance applies to <20% down payments under $1M.
Premiums = 2.8–4% of mortgage, added to balance.
Avoid with 20% down, gifted funds, or price structuring.
Insured mortgages can still make sense for earlier entry.
Your Path to Smarter Home Financing
Mortgage insurance = lender protection, not borrower protection.
Mandatory under 20% down.
Protects lender, not borrower.
Premium is added to your mortgage.
Example: $500k Mortgage @ 10% Down
2.8–4% added.
Capitalized into loan.
Increases monthly cost.
Insured mortgages are not always bad:
Faster entry into market.
Sometimes better rates.
Can be portable.
Ways to avoid:
Example:
20% down = no premiums.
<$1M = key threshold.
Negotiating price can save tens of thousands.
