CMHC
Canada Mortgage and Housing Corporation
Canada Mortgage and Housing Corporation, the federal Crown corporation that provides mortgage default insurance (required when you put less than 20% down with a federally regulated lender) and runs national housing programs. The core eligibility rules for government-backed insured mortgages are set federally; CMHC publishes its own underwriting criteria on top.
CMHC is one of three mortgage default insurers, alongside the private insurers Sagen and Canada Guaranty. Lenders choose which insurer to use, and their criteria differ slightly on edge-case files. The insurance protects the lender, but you pay the premium.
The boundaries of the insured market: purchase price below $1.5 million (raised from $1 million on December 15, 2024); minimum down payment of 5% on the first $500,000 and 10% on the portion above; maximum amortization of 25 years, or 30 years for first-time buyers and new builds; and a one- to four-unit property with at least one unit owner-occupied. CMHC's debt-service limits are 39% GDS and 44% TDS.
CMHC's premium runs from 0.60% to 4.50% of the loan depending on loan-to-value (4.00% at 90.01–95% LTV with a traditional down payment). In Ontario, provincial sales tax applies to the premium and must be paid in cash at closing; it can't be added to the mortgage.
Insured mortgages usually carry the lowest rates because the lender's risk is covered, which is why a 5–10% down insured purchase can price below a 20%-down uninsured one.
Worked example
Illustrative: a $600,000 purchase with the minimum down payment of $35,000 (5% of $500,000 = $25,000, plus 10% of $100,000 = $10,000).
Loan: $565,000, which is 94.2% loan-to-value, so CMHC's 4.00% premium tier applies: $565,000 × 4.00% = $22,600, added to the mortgage for a total of $587,600.
Ontario's 8% provincial sales tax on the premium (about $1,808) is paid separately at closing.
Illustrative figures only, rounded; not a quote or current rate. See today’s rates on our live board.
Sources
- CMHC mortgage loan insurance cost (CMHC)
- Calculating GDS / TDS (CMHC)
- Boldest mortgage reforms in decades come into force today (Dec 15, 2024) (Department of Finance Canada)
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