/
Direct answer
In Canada, mortgage default insurance (CMHC, Sagen, Canada Guaranty) is mandatory on purchase prices under $1,500,000 when buying with less than 20% down. The premium is 4.00% of the loan for 5%–9.99% down, 3.10% for 10%–14.99% down, and 2.80% for 15%–19.99% down. In Ontario (8%), Quebec (9.975%), and Saskatchewan (6%), provincial sales tax on the insurance premium must be paid in cash at closing.
Calculate mandatory Canadian mortgage default insurance premiums, provincial PST cash due at closing, and down payment tier savings under the $1.5M insured mortgage cap.
Ontario (8%), Quebec (9.975%), and Saskatchewan (6%) charge provincial sales tax on mortgage insurance that must be paid in cash at closing.
See exact insurance premiums and closing tax saved by moving up to higher down payment tiers.
| Down Payment Tier | Down Payment Cash | CMHC Rate | CMHC Premium | PST (ON) | Monthly Payment |
|---|---|---|---|---|---|
| 5% to 9.99% Down | $50,000 | 4.00% | $28,000 | $2,240 | $4,147/mo |
| 10% to 14.99% Down | $75,000 | 3.10% | $20,925 | $1,674 | $3,965/mo |
| 15% to 19.99% Down | $112,500 | 2.80% | $17,850 | $1,428 | $3,734/mo |
| 20%+ Conventional (No CMHC) | $150,000 | 0.00% | $0 (Exempt) | $0 | $3,418/mo |
Essential mortgage default insurance rules, tax caveats, and qualification requirements.
In Ontario (8%), Quebec (9.975%), and Saskatchewan (6%), PST on your CMHC premium cannot be rolled into the mortgage. You must pay this tax out-of-pocket on closing day.
Effective December 15, 2024, the federal insured mortgage cap is $1,500,000. Homes priced at or above $1.5M require a full 20% down payment with zero insurance availability.
Your household income must qualify at the greater of 5.25% or your contract interest rate + 2.00%, with Gross Debt Service (GDS) capped at 39% and Total Debt Service (TDS) at 44%.
Because default insurance eliminates credit risk for the lender, insured mortgages typically receive interest rates 0.20% to 0.35% lower than conventional uninsured mortgages.
If you sell and buy a new property before your mortgage matures, you can port your CMHC premium to your next home to avoid paying the full insurance premium a second time.
Insured 30-year amortizations are permitted for first-time homebuyers purchasing any property type or all buyers purchasing newly constructed homes.
Connect your insured loan amount into complete stress testing and upfront closing cash.
Estimate provincial Land Transfer Tax, legal fees, title insurance, and PST on CMHC.
Test your household income against GDS (39%) and TDS (44%) stress-test rules.
Explore 25 vs 30-year schedules, accelerated payments, and prepayments.
Under Canadian federal law (OSFI and the Bank Act), high-ratio mortgages—where the borrower provides a down payment of less than 20% of the purchase price—must be protected by mortgage default insurance. This insurance protects the mortgage lender against default loss, allowing Canadian financial institutions to offer lower interest rates to high-ratio homebuyers.
Standard Premium Calculation: Total CMHC Premium = (Purchase Price − Down Payment) × Applicable Tier Rate (%)
| Down Payment (% of Price) | Loan-to-Value (LTV) | CMHC Premium Rate | Example on $750k Purchase |
|---|---|---|---|
| 5.00% to 9.99% | 90.01% to 95.00% | 4.00% | $28,000 ($50k down) |
| 10.00% to 14.99% | 85.01% to 90.00% | 3.10% | $20,925 ($75k down) |
| 15.00% to 19.99% | 80.01% to 85.00% | 2.80% | $17,850 ($112.5k down) |
| 20.00% or greater | 80.00% or less | 0.00% (Exempt) | $0 ($150k down) |
In Canada, the minimum down payment is graduated based on the property price:
While the CMHC insurance premium itself is added to your mortgage balance and paid off monthly, provincial governments in Ontario, Quebec, and Saskatchewan levy provincial sales tax on the insurance premium that cannot be rolled into the mortgage:
Authored by usecos.app Research & Engineering. Verified against Canada Mortgage and Housing Corporation (CMHC), OSFI B-20 underwriting standards, and provincial tax statutes.