CMHC Insurance Explained: What Every Canadian Homebuyer Needs to Know
Last updated: 2026-02-01 · Author: usecos Team
CMHC insurance (mortgage default insurance) protects lenders when borrowers put less than 20% down. But the cost falls on you — and it's significant.
How CMHC Premiums Work (2026 Rates)
| Down Payment | Premium Rate | On $500K Loan |
|---|---|---|
| 5-9.99% | 4.00% | $20,000 |
| 10-14.99% | 3.10% | $15,500 |
| 15-19.99% | 2.80% | $14,000 |
| 20%+ | 0% | $0 |
When CMHC Applies
- Purchase price under $1,000,000 (with < 20% down)
- Purchase price $1,000,000-$1,499,999 (with < 20% down, different rules)
- Does NOT apply to homes ≥ $1,500,000
- Does NOT apply to refinancing
How to Avoid CMHC
- Save 20% down payment — the most direct path. On a $600K home, that's $120K.
- Gifted down payment — immediate family can gift funds. Must be documented.
- First-Time Home Buyer Incentive — government shared-equity program reduces effective mortgage.
- Credit union alternative — some credit unions offer "no CMHC" products with slightly higher rates.
Is CMHC Always Bad?
Not necessarily. If home prices are rising 5%+ annually, getting in earlier with CMHC may beat waiting 2-3 years to save 20%. Run the numbers with our Mortgage Calculator to compare scenarios.
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