Cost of Buying | Financing
Mortgage Default Insurance
Commonly called CMHC insurance. It is what makes a purchase with less than twenty percent down possible, and it protects the lender, not the borrower.
The short answer
Mortgage default insurance is required when you put down less than 20% and the price is below $1.5 million. The premium is a percentage of the loan that rises as your down payment falls, and it is normally added to the mortgage rather than paid up front.
| Rate | 25 years | 30 years |
|---|---|---|
| 4.00% | $4,568 | $4,129 |
| 4.50% | $4,806 | $4,379 |
| 5.00% | $5,051 | $4,635 |
| 5.50% | $5,301 | $4,897 |
| 6.00% | $5,556 | $5,165 |
Mortgage only. Strata fee, property tax, and insurance are extra; the monthly cost page adds them up. The Bank of Canada posted five-year rate was 6.09% on 2026-09-02, which is higher than the discounted rate most buyers are offered, which is why this is a grid rather than one number.
What it does
It insures the lender against your default. It does not protect you, and it is not the same thing as mortgage life insurance, which is a different product entirely.
What it does for you is make the purchase possible at all with a smaller down payment, which for most first-time buyers is the difference between buying and not.
What it costs
The premium is a percentage of the loan and it steps up as the loan-to-value ratio rises. At twenty percent down or more, no premium applies on a standard purchase. Below that there are bands, and the smallest down payment carries the highest rate.
The premium is normally added to the mortgage principal rather than paid in cash, which means you pay interest on it for the life of the loan. The carrying cost tables on this site include it in the loan for that reason.
Where it stops being available
At a purchase price of one and a half million dollars or more, insurance is unavailable, which is what makes twenty percent the floor at that level.
Current premium bands are published by CMHC and linked below. Check them rather than relying on remembered figures.
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Common questions
What does mortgage default insurance cost?
A percentage of the loan that rises as your down payment falls, published by CMHC in bands by loan-to-value ratio. At 20% down or more, no premium applies on a standard purchase. It is normally added to the mortgage rather than paid in cash.
Does it protect me?
No. It insures the lender against your default. It is not mortgage life insurance, which is a separate product that pays out to your estate. What it does for you is make a purchase possible with less than 20% down.
Can I avoid it?
By putting 20% or more down. At a purchase price of $1.5 million or above you have no choice, because insurance is unavailable and 20% becomes the minimum.
Where these figures come from
- CMHC, mortgage loan insurance premiums
2.80% at 80.01 to 85% LTV, 3.10% to 90%, 4.00% to 95%.
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- CMHC, mortgage loan insurance for consumers
Insurance is unavailable at a purchase price of $1.5M or more, where 20% down is required.
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Work the numbers on a real home
Every figure here comes from government sources and from listings you can open. Search the market and check the costs against a specific price rather than a hypothetical one.