CMHC Coverage and Benefits

Introduction

CMHC mortgage loan insurance benefits both homebuyers and lenders by enabling mortgages with less than a 20% down payment. This protection allows more Canadians to enter the housing market sooner and helps stabilize the mortgage lending market by reducing risk to lenders. This landing page explains the key benefits of CMHC coverage, the value it offers to borrowers, and additional programs available.

Benefits to Homebuyers

Access to Homeownership with Low Down Payment

CMHC insurance allows qualified buyers to purchase a home with as little as a 5% down payment instead of the typically required 20%.
This lowers the barrier to entry and makes homeownership more attainable, especially for first-time buyers.

Explore our full CMHC Mortgage Explained Guide for background and examples.

Competitive Mortgage Interest Rates

Because CMHC mortgage insurance lowers the risk for lenders, insured mortgages often come with lower interest rates compared to uninsured mortgages.
This can reduce monthly mortgage payments and the total interest paid over the life of the loan.

For premium cost calculations, try the CMHC Insurance Calculator.

Protection for Lenders Enhances Market Stability

Lenders are protected against borrower default, which ensures they are willing to provide mortgages to a broader range of buyers.
This protection contributes to stability in the Canadian housing and mortgage markets, benefiting the overall economy.

Portability – Transferring Insurance When Moving

CMHC allows borrowers who already have mortgage insurance to “port” or transfer their insurance to a new qualifying home if they move within a certain timeframe.
This can reduce or eliminate the need to pay a new insurance premium when refinancing or buying a new home.

Learn more about this in our Mortgage Application Process page.

Additional Programs and Rebates

Energy-efficient homes may qualify for a partial premium refund.
CMHC offers special programs for first-time buyers and renovations.
Premium refunds are available if the insured mortgage is cancelled within set periods.

Details on rules and updates here.

Who Benefits from CMHC Insurance?

First-time homebuyers with limited down payment funds.
Buyers purchasing newly built homes or less expensive properties.
Homeowners who want to upgrade or refinance with lower initial equity.
Lenders looking for reduced risk in high-ratio mortgage lending.

If you’re wondering if you qualify, see our How to Qualify for a CMHC Mortgage page.

Frequently Asked Questions

Does CMHC insurance protect me?
It protects the lender from losses in case of mortgage default, but the ultimate benefit is access to mortgage financing with a smaller down payment.

How is the premium paid?
Most borrowers add the premium to their mortgage principal, spreading out payments over the life of the loan.

Can I get a premium refund?
Yes, under certain conditions such as early cancellation, energy-efficient homes, or mortgage portability.