Mortgage insurance
in Canada,
explained.
Three completely different products share the same name. We sort out which one applies to your file — mandatory CMHC, optional protection, or personal term life — and which to skip.
We do the insurance math
before you sign anything.
The right coverage saves money. The wrong one — or unnecessary coverage — costs it. We show you the full numbers before you commit.
Exactly when default insurance applies
Any purchase with less than 20% down triggers mandatory mortgage default insurance. We tell you the precise threshold, the premium band you fall into, and whether putting more down actually saves money overall.
Your CMHC premium calculated
Your exact premium band — 4.00% at 5% down, 3.10% at 10%, 2.80% at 15%, 0% at 20%+ — plus the Ontario, Quebec or Saskatchewan PST you pay in cash at closing, before you commit.
All three tiers modelled
Insured pricing often carries the lowest rates on the board. We model insured, insurable and conventional paths for the lowest all-in cost — not just the lowest rate headline.
Flag the optional insurance trade-offs
The lender's optional mortgage protection insurance is never required. We explain the key trade-off — shrinking benefit, flat premium, payout goes to the lender — before you tick the box at signing.
Sort it out in
three steps.
Identify the type, model the cost, get the right coverage — or skip the one you don't need.
Figure out which “mortgage insurance” you mean
Default insurance (CMHC), protection insurance (life / critical illness / disability), or personal term life — we sort out which one applies to your purchase in a 5-minute conversation.
Model the real cost
For default insurance we calculate your exact premium band and the provincial PST; for protection coverage we lay out the trade-offs versus a personal policy, in plain numbers.
Get the right coverage, skip the rest
We arrange the mortgage with insured pricing where it wins, and refer you to a licensed life agent for any personal life, critical illness or disability coverage — no pressure to add anything you don’t need.
We can help with
any insurance question.
Tap any situation below to see how we approach it.
If you’re…You’re buying with less than 20% down and want the exact cost
You’re buying with less than 20% down and want the exact cost
We calculate your precise CMHC / Sagen / Canada Guaranty premium band and the provincial PST owing at closing — before you make an offer. Most buyers are surprised by the Ontario PST; it can’t be financed.
Calculate my premiumIf you’re…You’re deciding whether to stretch to 20% down to avoid insurance
You’re deciding whether to stretch to 20% down to avoid insurance
Insured rates are often the lowest on the board. We model the total cost both ways — insured rate with premium vs. uninsured rate at 20% down — so you choose with the full picture, not just the premium headline.
Model both pathsIf you’re…The lender handed you a checkbox for protection insurance at signing
The lender handed you a checkbox for protection insurance at signing
That optional mortgage life, critical illness or disability coverage is never required. We explain the key trade-off: the benefit shrinks as you pay down the mortgage, the premium usually stays flat, and the payout goes to the lender — not your family.
See the comparisonIf you’re…You want life coverage on your mortgage but aren’t sure which product
You want life coverage on your mortgage but aren’t sure which product
For most borrowers a personal term life policy is cheaper, portable, and pays your family directly — not the lender. We refer you to a licensed life agent to compare; we handle the mortgage side.
Mortgage life vs term lifeIf you’re…You’re a first-time buyer confused by all the insurance terms
You’re a first-time buyer confused by all the insurance terms
CMHC, Sagen, Canada Guaranty, protection insurance, term life — one 5-minute conversation with your advisor sorts out which applies to your file and which to skip entirely.
Get sorted in 5 minutesIf you’re…You’re renewing and wondering about mortgage protection coverage
You’re renewing and wondering about mortgage protection coverage
The lender will offer the same checkbox again at renewal. Now is also the time to reassess your equity position and consider whether your personal life or disability coverage needs have changed since you first bought.
Talk to an advisorDefault insurance premiums —
by down payment.
The premium is calculated on the mortgage amount, not the purchase price — and it's usually financed in. Ontario PST is not.
| Type | Required? | Protects | Cost structure | Alternative |
|---|---|---|---|---|
| Mortgage default insurance (CMHC / Sagen / Canada Guaranty) | Yes — under 20% down | The lender | 2.80%–4.00% of loan, financed in | 20% down removes it |
| Mortgage protection (creditor) insurance | No — always optional | You / your family (payout to lender) | Flat premium, shrinking benefit | Personal term life policy |
| Personal term life insurance | No — you buy it yourself | Your family directly | Level premium, level benefit | — (usually the strongest option) |
Illustrative premium figures only — your exact premium depends on mortgage amount and loan-to-value ratio. Use the CMHC calculator for your exact number.
Common questions,
clear answers.
Default vs. protection, mandatory vs. optional, CMHC premiums — answered plainly.
What is mortgage insurance in Canada?
“Mortgage insurance” is really an umbrella for three unrelated products. Mortgage default insurance (CMHC, Sagen, Canada Guaranty) is mandatory with less than 20% down and protects the lender. Mortgage protection insurance is optional life, critical illness or disability coverage the lender offers that pays down your mortgage. Term life insurance is a personal policy you buy yourself. They’re often confused because they share a name — but they do completely different jobs.
Is mortgage insurance mandatory?
Only mortgage default insurance is mandatory, and only when your down payment is under 20% of the purchase price. Mortgage protection insurance (the optional life / critical illness / disability coverage the lender offers at signing) is never required to get a mortgage — you can decline it and buy a personal policy instead.
How much is mortgage default insurance?
It’s a percentage of the mortgage loan based on your loan-to-value: about 4.00% at 5% down, 3.10% at 10% down, 2.80% at 15% down, and 0% at 20%+ down. On a $500,000 mortgage that’s roughly a $20,000 premium at 5% down — usually financed into the mortgage. In Ontario, Quebec and Saskatchewan you also pay provincial sales tax on the premium in cash at closing. Get your exact figure on the CMHC calculator.
What’s the difference between mortgage default insurance and mortgage protection insurance?
Mortgage default insurance protects the lender if you stop paying and is mandatory with less than 20% down. Mortgage protection insurance protects you and your family — it pays down the mortgage if you die, fall critically ill, or become disabled — and is always optional. One is about the loan; the other is about your life. Don’t confuse the mandatory default premium with the optional protection coverage.
Does mortgage protection insurance cover critical illness and disability?
It can. Lenders typically offer mortgage life insurance (pays the balance if you die), and often add critical illness (a lump sum on a covered diagnosis) and disability (covers your payments if you can’t work) as riders. Coverage terms vary by lender and are often post-claim underwritten, so it’s worth comparing a personal policy — see mortgage life vs term life.
Do you sell mortgage life insurance?
No. We’re a licensed mortgage brokerage (FSRA #13737), not a life-insurance advisor. We handle the mortgage — including telling you when default insurance applies and shopping insured rates — and we explain the trade-offs on the lender’s optional protection insurance so you don’t overpay. For the actual life, critical illness or disability policy, we refer you to a licensed life-insurance agent.
We’ll try to beat your rate.
If we can’t, we pay you $500.¹
¹ Rate Beat: eligible Big-6 bank written offers only · same product, term & amount · $500 paid to you or your nominated charity at closing · conditions apply
Mortgage insurance by market
Whether default insurance applies to you is a local question. It turns on your price band against the tiered minimum down payment, and on the $1.5 million ceiling above which the insurance can't be bought at all. Each market hub works that out against its own sourced average price.