CMHC Insurance Explained for Canadian Homebuyers

Direct answer: CMHC mortgage loan insurance generally applies when you buy an eligible Canadian home with less than 20% down. It protects the lender, but the borrower pays the premium. For homeowner insured loans, CMHC says the purchase price must be below $1,500,000, and the premium is a one-time charge that may be added to the mortgage balance.

Primary sources: CMHC Purchase program; CMHC premium information.

Use this page to understand the rule, then run the numbers in the Mortgage Calculator, the $500k mortgage payment benchmark, or the focused CMHC insurance calculator.

Current CMHC eligibility rules

Primary sources: CMHC Purchase program; CMHC Home Start; CMHC premium information.

Rule	Current usecos interpretation	Primary source
Purchase price limit	Homeowner insured purchase must be below $1,500,000.	CMHC Purchase
Standard maximum amortization	25 years for the standard CMHC Purchase program.	CMHC Purchase
30-year insured amortization	Available through CMHC Home Start where the borrower/property qualifies.	CMHC Home Start
Premium payment	One-time premium, commonly added to the insured loan amount.	CMHC premium information

Premium rates and worked examples

Primary sources: CMHC premium information.

Example	Loan-to-value	Premium rate	Premium
$500,000 home, 5% down	95%	4.00%	$19,000 on a $475,000 base loan
$500,000 home, 10% down	90%	3.10%	$13,950 on a $450,000 base loan
$500,000 home, 15% down	85%	2.80%	$11,900 on a $425,000 base loan
$1,400,000 home, minimum down	91.8%	4.00%	About $51,400 on a $1,285,000 base loan

The premium formula is: premium = base mortgage amount x CMHC premium rate. If the premium is added to the mortgage, interest is charged on that premium over time.

When you usually need it

• Your down payment is below 20%.
• The home is eligible for homeowner mortgage loan insurance and is below the current purchase-price limit.
• The mortgage is a purchase, not a refinance. Refinances are not handled the same way as insured high-ratio purchases.

Costs people miss

Primary sources: CMHC premium information.

• Sales tax on the premium: CMHC notes that some provinces, currently Ontario, Quebec and Saskatchewan, apply provincial sales tax to the mortgage loan insurance premium, and that sales tax cannot be added to the loan amount.
• Interest on the premium: Adding the premium to the mortgage makes the up-front cash cost lower, but increases total interest.
• Eligibility is not approval: Meeting the purchase-price and down-payment thresholds does not mean a lender must approve the file.

How to avoid or reduce it

1. Reach 20% down if the delay does not create a worse overall outcome.
2. Compare 5%, 10%, 15% and 20% down scenarios in the calculator. The premium rate drops at common LTV bands.
3. Confirm first-time buyer and new-construction amortization eligibility before assuming a 30-year insured amortization.
4. Keep closing cash separate for premium sales tax where applicable, land transfer tax, legal fees and adjustments.

Methodology and assumptions

Examples use purchase price, down payment and CMHC premium-rate bands only. They exclude lender rate adjustments, sales tax on the premium, closing costs, property tax, income qualification, property-specific underwriting and provincial rebate programs. Verified July 29, 2026 against CMHC purchase, Home Start and premium-information pages.

Sources: CMHC Purchase; CMHC Home Start; CMHC premium information; Department of Finance insured-mortgage reforms effective December 15, 2024.