Canada Mortgage and Housing Corporation (CMHC) mortgage default insurance is required on Canadian mortgages with less than 20% down payment. The insurance protects the lender (not the borrower) against default. Sagen and Canada Guaranty also offer mortgage default insurance with virtually identical pricing.
Premium tiers
| Loan-to-value | Premium rate |
|---|---|
| Up to 65% | 0.60% |
| 65.01% to 75% | 1.70% |
| 75.01% to 80% | 2.40% |
| 80.01% to 85% | 2.80% |
| 85.01% to 90% | 3.10% |
| 90.01% to 95% | 4.00% |
Insured price cap
Mortgage default insurance is available only on properties priced up to $1,500,000. Above that price, a 20%+ down payment is required and no insurance is available.
Premium payment
The premium is added to the mortgage principal and amortized over the life of the loan. PST applies to the premium in Ontario, Quebec, Saskatchewan, and Manitoba (paid one-time at closing).