CMHC mortgage rules govern when mortgage default insurance is required, how much it costs, and what types of properties and borrowers are eligible. Understanding these rules helps you plan your down payment, budget for insurance costs, and understand the limits on purchase price.
What Is CMHC Mortgage Insurance?
The Canada Mortgage and Housing Corporation (CMHC) is a federal Crown corporation that provides mortgage default insurance for high-ratio mortgages — those with a down payment of less than 20%. The insurance protects the lender if the borrower defaults, which allows lenders to offer mortgages to buyers with smaller down payments and at lower interest rates than they otherwise would.
Two private insurers also provide the same product: Sagen (formerly Genworth Canada) and Canada Guaranty. All three are approved by the federal government, and all charge similar premiums. Your lender typically chooses the insurer.
When Is CMHC Insurance Required?
CMHC insurance is required by law whenever:
- The down payment is less than 20% of the purchase price
- The mortgage is from a federally regulated financial institution (bank, federal credit union, trust company)
- The home is located in Canada and is the borrower’s principal residence
Insurance is not required when:
- The down payment is 20% or more (conventional mortgage)
- The purchase price exceeds $1,499,999 (as of December 2024)
- The property is a commercial property or non-owner-occupied rental
- The lender is a provincial credit union that chooses not to participate
Current CMHC Insurance Premium Rates (2026)
| Down Payment | Loan-to-Value | Premium (% of Mortgage) |
|---|---|---|
| 5% – 9.99% | 95% – 90.01% | 4.00% |
| 10% – 14.99% | 90% – 85.01% | 3.10% |
| 15% – 19.99% | 85% – 80.01% | 2.80% |
| 20%+ | Under 80% | No insurance required |
Extended amortization premium (30-year, new construction): An additional 0.20% surcharge applies to 30-year amortizations.
The premium is added to your mortgage balance and amortized over the life of the loan.
Premium Example
On a $700,000 home with a 5% down payment ($35,000):
- Mortgage amount: $665,000
- Insurance premium: $665,000 × 4.00% = $26,600
- Total mortgage: $691,600
Provincial sales tax (PST/QST) on the premium must be paid at closing in Ontario, Quebec, Manitoba, and Saskatchewan — this cannot be added to the mortgage.
Minimum Down Payment Rules (2026)
| Purchase Price | Minimum Down Payment |
|---|---|
| Up to $500,000 | 5% |
| $500,001 – $999,999 | 5% on first $500K + 10% on remainder |
| $1,000,000 – $1,499,999 | 5% on first $500K + 10% on next $500K + 5% on remainder |
| $1,500,000+ | 20% minimum (not insurable) |
Example for a $900,000 home:
- First $500,000 × 5% = $25,000
- Remaining $400,000 × 10% = $40,000
- Minimum down payment: $65,000
The 2024 Rule Changes
Higher insured price cap
Effective December 15, 2024, the maximum purchase price eligible for insured mortgages rose from $999,999 to $1,499,999. This change was significant for buyers in high-cost markets like Toronto and Vancouver, where average home prices routinely exceed $1 million.
30-year amortizations for first-time buyers (new construction)
Starting August 1, 2024, first-time homebuyers purchasing a newly built home became eligible for a 30-year insured amortization — up from the previous 25-year limit. This reduces monthly payments and improves affordability.
CMHC Insurance and the Stress Test
All insured mortgages require buyers to pass the mortgage stress test. You must qualify at your contract rate plus 2%, or 5.25%, whichever is higher. This means even if you qualify for the mortgage payment at the advertised rate, you must prove you could handle a rate 2 percentage points higher.
What CMHC Insurance Covers — and Doesn’t Cover
CMHC insurance protects the lender — not you. If you default on your mortgage:
- CMHC pays the lender the outstanding balance
- You are still responsible for the difference between the sale price and what CMHC pays
- Your credit is impaired and CMHC may pursue you for the shortfall
CMHC insurance is not:
- Life insurance (which pays off your mortgage if you die)
- Creditor insurance (which covers payments if you lose your job)
- Home insurance (which covers the structure)
Eligible Property Types
CMHC insures mortgages on:
- Owner-occupied 1–4 unit residential properties
- New construction (with appropriate warranty)
- Rental properties (with different LTV limits and additional premiums)
CMHC does not insure:
- Vacant land or lot-only purchases
- Commercial properties
- Properties with purchase prices above $1,499,999
- Second homes or vacation properties (as primary insured purpose)
Key Takeaways
- CMHC insurance is mandatory when your down payment is under 20% and the purchase price is under $1.5 million
- Premiums range from 2.80% to 4.00% of the mortgage amount, added to the loan balance
- The 2024 rule changes increased the insured price cap and added 30-year amortizations for first-time new construction buyers
- Insurance protects the lender, not the borrower — you can still owe money after a foreclosure
- Use our mortgage affordability calculator to model your down payment and insurance costs
Related: Mortgage Stress Test Canada · New Mortgage Rules 2026 · Mortgage Pre-Approval Guide · Mortgage Rules and Regulations Hub