Educational tool — mortgage loan insurance
Mortgage loan insurance premium (CMHC)
With less than 20% down, mortgage loan insurance is mandatory in Canada. The premium is added to your loan — but the provincial tax on that premium is due in cash at closing. Here's how much to plan for.
All three insurers (CMHC, Sagen and Canada Guaranty) charge the same premium rates. Your lender picks the insurer; the cost to you is the same.
Calculate your premium
Base loan
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Loan-to-value ratio
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Premium rate
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Insurance premium
Total loan (with premium)
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Tax on premium — cash at closing
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The premium table
The premium is a percentage of the loan amount (not the price). It depends on your loan-to-value ratio: the smaller your down payment, the higher the rate. At 20% or more down, insurance simply isn't required.
| Loan-to-value | Down payment | Premium (25 yr) | Premium (30 yr) |
|---|---|---|---|
| 80.01% to 85% | 15% to 19.99% | 2.80% | 3.00% |
| 85.01% to 90% | 10% to 14.99% | 3.10% | 3.30% |
| 90.01% to 95% | 5% to 9.99% | 4.00% | 4.20% |
| 90.01% to 95% — non-traditional down payment | 5% to 9.99% | 4.50% | 4.70% |
A 30-year amortization adds 0.20 percentage points to the premium; for insured loans it is limited to first-time buyers and new constructions. At a loan-to-value of 80% or less, insurance is not mandatory, but a lender may still insure the loan (premiums of 0.60% to 2.40% depending on the ratio).
The forgotten amount: the tax on the premium
In Quebec, a 9% tax applies to the mortgage loan insurance premium. Unlike the premium itself, it cannot be added to your loan: it is due in cash at closing, at the notary's office. Note that this rate rises to 9.975% for premiums paid after December 31, 2026. Ontario (8%) and Saskatchewan (6%) also levy a provincial tax.
How to reduce — or avoid — the premium
Reach the next tier
Going from 5% to 10% down drops the rate from 4.00% to 3.10%. On a $500,000 purchase, that's $5,050 less in premium — on top of a smaller loan.
Get to 20%
At 20% down, insurance is no longer required: $0 premium. The FHSA and the HBP can help you get there faster.
Budget your closing costs
The tax on the premium adds to your other cash closing costs (notary, land transfer tax, inspection). Plan for it in your closing budget, not as a surprise.
Frequently asked questions
Is mortgage loan insurance mandatory?expand_more
Yes, whenever the down payment is less than 20% of the price (loan-to-value above 80%), for properties under $1,500,000. At $1,500,000 or more, a mortgage is not insurable and at least 20% down is required.
Who gets the premium: CMHC, Sagen or Canada Guaranty?expand_more
All three insurers offer mortgage loan insurance in Canada at the same premium rates. Your lender chooses the insurer based on its arrangements; "CMHC insurance" is often used as a generic term. The insurance protects the lender if you default — the buyer pays the premium.
Is the premium paid in cash?expand_more
No: the premium is normally added to your loan amount, so you repay it with interest over the amortization. Only the provincial tax on the premium is due in cash at closing. You can also choose to pay the premium in cash to avoid interest on it.
Can you get part of the premium back?expand_more
Yes, in some cases: insurers offer a partial refund (up to 25% with CMHC) when you buy or build a qualifying energy-efficient home. Conditions vary; check your property's eligibility with your lender.
Educational tool only. The premium rates and taxes shown are those published by CMHC and the provinces as of October 2026; your lender will confirm the exact amounts for your file. HypothequeGo.ca is not a mortgage brokerage firm.