What You Need To Know About Cmhc Mortgage Insurance In 2023

CMHC to Increase Mortgage Insurance Premiums Kevin & Tina Girard
CMHC to Increase Mortgage Insurance Premiums Kevin & Tina Girard from www.gteam.ca

What Is CMHC Mortgage Insurance?

CMHC (Canada Mortgage and Housing Corporation) mortgage insurance is a form of loan insurance that protects lenders if a borrower defaults on their mortgage payments. It is the largest provider of mortgage loan default insurance in Canada and is one of the three government-backed insurance providers. CMHC mortgage insurance helps borrowers obtain favourable mortgage loan terms, even if they don’t have the highest credit score or largest down payment. Lenders can insure mortgages with loan-to-value ratios up to 95% with CMHC insurance.

Who Needs CMHC Mortgage Insurance?

CMHC mortgage insurance is for borrowers who have a down payment of less than 20% of the purchase price. For example, if you’re buying a $500,000 home, then you need a minimum of $100,000 as a down payment. If you can’t afford this amount, CMHC insurance can help you obtain a better mortgage loan. Borrowers with less than 20% down payment must pay premiums to obtain mortgage insurance.

What Are the Benefits of CMHC Mortgage Insurance?

CMHC mortgage insurance offers several benefits to borrowers who don’t have a 20% down payment. One of the most significant benefits is that you can obtain a better mortgage loan than you would without mortgage insurance. It can also help you buy a home sooner, since you don’t need to save up for a large down payment. Furthermore, CMHC insurance allows lenders to offer borrowers better loan terms, such as lower interest rates.

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How Much Does CMHC Mortgage Insurance Cost?

The amount of CMHC insurance you will need to pay depends on the size of your down payment and the value of the home you’re buying. Generally, the larger the loan and the lower the down payment, the higher the premium. The premium can range from 0.6% to 3.15% of the total loan amount, depending on the size of the down payment.

Are There Any Other Costs?

In addition to the CMHC insurance premium, there are other costs associated with obtaining a mortgage loan. These include legal fees, appraisal fees, and title insurance. You may also need to pay for an inspection and other closing costs depending on the lender. Be sure to factor these costs into your budget when calculating your down payment.

What Are the Alternatives to CMHC Mortgage Insurance?

If you’re looking for an alternative to CMHC mortgage insurance, there are a few options. One option is Genworth Canada, another government-backed provider of mortgage loan default insurance. Genworth offers competitive premiums, but the coverage is only available for loans with a loan-to-value ratio of up to 85%. There is also lender insurance, which is offered by some banks and credit unions. This type of insurance is typically cheaper than CMHC insurance, but the coverage is often limited to a loan-to-value ratio of 80%.

How to Apply for CMHC Mortgage Insurance?

If you’re looking to buy a home and need CMHC mortgage insurance, the first step is to apply for a mortgage loan with a lender that offers CMHC insurance. Once you have been approved for the loan, the lender will contact CMHC to arrange the insurance. The process is generally quick and straightforward, and you’ll be notified once the insurance has been approved.

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What Happens If I Lose My Job?

If you lose your job and are unable to make your mortgage payments, CMHC will provide financial support to help you pay off your loan. This is known as mortgage loan default insurance and can help you avoid foreclosure. However, this support is only available if you are able to prove an unforeseeable change in your financial circumstances.


CMHC mortgage insurance is a valuable form of loan default insurance that helps borrowers with less than 20% down payment obtain favourable mortgage loan terms. It can help you buy a home sooner and can provide financial support in the event of a job loss. If you’re looking to buy a home in 2023, be sure to consider CMHC mortgage insurance.