Understanding how mortgage insurance works is key to buying with confidence.
If your down payment is less than 20% of the home’s purchase price, you’ll need mortgage default insurance. This coverage protects the lender if you default on your loan — and helps you qualify for a mortgage with a smaller down payment.
What Mortgage Insurance Is
- Purpose: Mortgage insurance protects the lender, not the borrower, but it enables Canadians to buy homes with as little as 5% down.
- Who Needs It: Anyone purchasing a home with a down payment under 20%.
- Premiums: Added to your mortgage and repaid over time. The cost depends on your loan-to-value ratio (LTV).
- How It Helps Buyers:
- Access to homeownership sooner
- Lower down payment requirements
- Competitive interest rates despite a smaller deposit
- Key Note: While it protects lenders, it also benefits buyers by reducing overall lending risk in the housing market.
CMHC (Canada Mortgage and Housing Corporation)
- About CMHC: Canada’s largest and most recognized mortgage insurer, backed by the federal government.
- Eligibility Requirements:
- Down payment of at least 5% (for homes up to $500,000)
- Home must be in Canada and used as your primary residence
- Amortization period cannot exceed 25 years
- Premium Ranges:
- 5% down → ~4% insurance premium
- 10% down → ~3.1%
- 15% down → ~2.8%
- Payment: Premiums can be paid upfront or added to your mortgage balance.
- CMHC Advantage: Strong government backing, standardized underwriting, and consumer protection policies.
Private Mortgage Insurers (Sagen & Canada Guaranty)
- Who They Are:
- Sagen (formerly Genworth Canada) and Canada Guaranty are the two main private mortgage insurers in Canada.
- How They Differ:
- Offer similar coverage to CMHC but may have slightly different qualification guidelines or flexible underwriting for unique borrower profiles.
- Some private insurers provide incentives for energy-efficient homes or first-time buyers.
- Premiums: Comparable to CMHC’s rates, based on down payment size and home price.
- Why Choose Private Insurers:
- More flexibility for self-employed buyers
- May allow for alternative credit verification
- Often faster approval times
- The Bottom Line: Whether CMHC or private, your mortgage broker will recommend the best insurer for your situation.
Final Word
At Safe & Sound Home Services, we believe understanding your mortgage insurance options helps you make confident, informed choices.
Our trusted mortgage partners can compare CMHC and private insurer benefits to ensure you get coverage that fits your goals — keeping your home financing journey truly safe and sound.
Place Your Bid Here
Advertise Here — Reach Homeowners Who Care
This page is an example of premium sponsored placement on Safe & Sound Home Services. Your organization, campaign, or community initiative could occupy this same space — seen by thousands of local homeowners, service professionals, and decision-makers every month.
Our sponsored features read like editorial content but deliver the visibility of a full-page ad — ideal for charities, home improvement brands, local lenders, or service providers looking to make a trusted connection.
👉 Ready to claim this space?
Place your bid today to secure this exclusive ad placement for your business or cause.