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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% premium tax), and Saskatchewan (6%), provincial tax on the insurance premium must be paid in cash at closing.
Jump to the calculator ↓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% premium tax), and Saskatchewan (6%) charge 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% premium tax), and Saskatchewan (6%), the tax on your CMHC premium cannot be rolled into the mortgage. You must pay it 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) |
Not included in the calculator: CMHC's premium schedule lists a higher 4.50% rate at 90.01%–95% loan-to-value when the down payment is non-traditional, and its notes mention a 0.20% surcharge for amortization beyond 25 years. The schedule does not make clear which loan types the surcharge covers, so confirm both with your lender. The results above use the standard rates.
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:
Many Canadian homebuyers debate whether to stretch their savings to 20% down or buy earlier with CMHC default insurance. Compare the trade-offs below:
| Mortgage Category | Down Payment | Mortgage Rate Spread | Default Premium & PST | Strategic Recommendation |
|---|---|---|---|---|
| Insured High-Ratio (< 20% Down) | 5% to 19.99% (Min. $25k on $500k) | 15–35 bps lower than conventional | 2.80% to 4.00% added to loan + cash PST (ON/QC/SK) | Best for buyers entering rising markets early; government backing yields lower bank funding costs and discounted rates. |
| Conventional (20%+ Down) | 20.00% or greater (Min. $100k on $500k) | Slightly higher interest rate (+0.20% to +0.35%) | $0 CMHC premium + $0 PST cash | Saves \$15,000–\$40,000 in capitalized insurance debt; allows 30-year amortizations to improve monthly debt-service ratios. |
| Insurable Low-Ratio (20%+ Bulk Insured) | 20.00% or greater on properties < $1.5M | Lowest non-high-ratio broker rates | Lender pays back-end portfolio insurance | Available through monoline mortgage brokers on owner-occupied homes under \$1.5M with 25-yr max amortization. |
CMHC insurance is calculated as a percentage of your total loan amount (purchase price minus down payment). The tier depends on your down payment: 4.00% for 5%–9.99% down, 3.10% for 10%–14.99% down, and 2.80% for 15%–19.99% down. The premium is added into your mortgage balance and paid off over your amortization period.
Yes. Putting down 20% or more of the purchase price classifies your loan as a conventional mortgage, which is exempt from mandatory CMHC mortgage default insurance.
No. In provinces that charge provincial sales tax on default insurance (Ontario 8%, Quebec 9%, Saskatchewan 6%), the PST cannot be added to the mortgage loan and must be paid in cash at closing.
The price cap for insured mortgages in Canada is $1,500,000. Homes priced at $1,500,000 or greater require a minimum 20% down payment and cannot be insured by CMHC.
Authored by usecos.app Research & Engineering. Verified against Canada Mortgage and Housing Corporation (CMHC), OSFI B-20 underwriting standards, and provincial tax statutes.