CMHC and Private Mortgage Insurance in Canada

Most Canadian buyers assume CMHC insures every high-ratio mortgage in the country, and most have never heard of the other two companies doing exactly the same job. Whenever your down payment sits under 20 percent, your lender chooses between three approved providers to insure that mortgage, CMHC, Sagen, or Canada Guaranty, and you don’t get a vote in which one they pick. The premium you pay is set by the same standardized rate structure across all three, but the underwriting flexibility behind that premium genuinely differs, and knowing that can matter a great deal if your financial situation isn’t perfectly straightforward.

What these three insurers actually do differently, the full premium structure by down payment size, how portability and refinancing interact with your existing coverage, and the practical details that decide what your specific file actually costs, are worth knowing well before your lender picks one for you.

What Mortgage Default Insurance Actually Protects

Mortgage default insurance exists to protect your lender, not you, if you stop making payments. It’s what allows a bank to approve a mortgage with as little as 5 percent down instead of demanding the traditional 20 percent, since the insurer absorbs the lender’s loss if the loan goes into default. CMHC’s own explainer confirms premium rates run from 0.6 percent up to 4.5 percent of the total mortgage amount, required whenever your down payment is under 20 percent and the home’s purchase price sits at or under $1.5 million. For the fuller mechanics of how insured mortgages fit into the broader financing picture, our guide to how CMHC insurance works covers the foundational rules this piece builds on.

Three Companies, One Standardized Rate Sheet

CMHC is a federal Crown corporation and the largest of the three by a wide margin, which is why its name gets used as shorthand for the whole category even when a different insurer is actually on the file. Sagen, formerly known as Genworth Canada, and Canada Guaranty are both private companies competing directly with CMHC for the same lender business. All three charge the same standardized premium rates for a standard, traditional-down-payment mortgage, since the rate structure is effectively set at the industry level rather than negotiated company by company.

Where the three genuinely diverge is underwriting flexibility on files that don’t fit a conventional profile. Sagen specifically offers mortgage insurance for self-employed borrowers, second mortgages, investment properties, and mortgages financed with a borrowed down payment, products CMHC’s more conservative guidelines don’t always accommodate. Canada Guaranty operates in a similar space, often serving as the more flexible option for rental property underwriting and non-standard property types. None of this changes the premium you’d pay for a standard, traditional purchase, but it matters directly if your income documentation, property type, or down payment source falls outside the conventional box, since your broker’s ability to route your file to a different insurer can be the difference between an approval and a decline.

The Premium Structure By Down Payment Size

The premium is calculated as a percentage of your total mortgage amount, and that percentage rises as your down payment shrinks. At 15 to 19.99 percent down, the premium runs 2.80 percent of the mortgage. At 10 to 14.99 percent down, it rises to 3.10 percent. At the minimum 5 to 9.99 percent down, the standard premium reaches 4.00 percent, the highest tier for a traditional down payment. If any portion of your down payment comes from a non-traditional source, such as a borrowed amount rather than your own savings, the premium on that 90.01 to 95 percent tier climbs further to 4.50 percent, the top of CMHC’s own stated 0.6 to 4.5 percent range.

Choosing a 30-year amortization instead of the standard 25 adds a further 0.20 percent surcharge on top of whichever base tier applies. On a $450,000 mortgage at the 4.00 percent tier, that surcharge alone adds $900 to the premium, a detail that rarely gets mentioned alongside the appeal of the lower monthly payment a longer amortization provides. Our full breakdown of amortization schedules covers the rest of that 25-versus-30-year tradeoff in depth.

A Real Number, Not Just A Percentage

Picture a $500,000 home in Ontario with 5 percent down, a $25,000 down payment against a $475,000 mortgage. At the 4.00 percent tier, the premium comes to $19,000, which most buyers roll directly into their mortgage rather than paying in cash. Ontario charges provincial sales tax on that premium specifically, adding roughly $1,520 that has to be paid separately in cash at closing, since provincial tax on the premium can’t be added to the loan itself. Manitoba doesn’t charge this tax at all, a genuine cost difference covered in more depth in our piece on mortgage rates by province. Running your own numbers through a proper affordability calculation before you shop is the only way to know what your specific premium tier actually adds to your total closing costs.

Portability Can Credit Back Part Of What You Already Paid

Here’s a genuinely useful mechanic most homeowners never learn about until they’re mid-move. If you sell your home and buy another one while keeping the same lender, CMHC’s portability feature can apply a premium credit against the new insurance requirement, based on how much time has passed since your original mortgage closed. Move within six months of your original closing date and the credit can cover the full premium you already paid. That credit shrinks the longer you wait, which means timing a move earlier in your ownership, if you have any flexibility on the decision, can meaningfully reduce what you’d otherwise pay to insure the new mortgage from scratch.

If your new mortgage amount is larger than what you’re porting over, you’ll pay a premium only on that increase, at whatever tier applies to the new loan-to-value ratio, not on the full new mortgage amount. That’s a materially better outcome than starting an entirely fresh insurance application would produce.

Refinancing Sits In A Different Category Entirely

Default insurance is built around helping you buy a home or port an existing insured mortgage to a new one, not around letting you pull equity out of a home you already own. A straight refinance that increases your loan amount against your existing property generally falls outside what standard mortgage default insurance covers, with narrow exceptions such as CMHC’s own refinance program for building a secondary suite, a specific-purpose product rather than a general equity take-out option. If tapping equity is genuinely what you’re after, that’s a different conversation entirely from the insurance mechanics covered here, and worth raising directly with a mortgage broker who can walk you through what’s actually available for that specific goal.

Two Different Products Share The Same Confusing Name

One last thing worth saying plainly, since it trips up enough buyers to deserve repeating. Mortgage default insurance, the topic of this entire piece, is not the same product as mortgage life insurance or creditor insurance, the optional coverage your lender offers at closing that pays out your mortgage balance if you pass away. The two get lumped together constantly because both get called “mortgage insurance” casually, but they protect entirely different parties for entirely different reasons. Our guide to mortgage financing in Canada covers that second product and how it compares to a standalone term life policy in more depth.

What To Confirm Before You Commit

Confirm your actual loan-to-value tier before assuming a premium percentage, since even a few thousand dollars of extra down payment can shift you into a meaningfully cheaper bracket. If your file involves self-employment income, a rental property, or a non-traditional down payment source, ask your broker directly which insurer they’re planning to submit to and whether a different one might serve your situation better, rather than assuming CMHC is the only option on the table. If a move is anywhere on your horizon, factor the portability premium credit’s declining schedule into your timing rather than treating your closing date as unrelated to it. And before comparing insured mortgage offers side by side, run the numbers through a mortgage calculator that accounts for the premium itself, not just the headline rate, since the premium is real money added to what you’re borrowing regardless of how favourable the rate looks on its own.