Mortgage default insurance
Required for many eligible mortgages with less than 20% down. It protects the lender against borrower default and helps qualified buyers access high-ratio financing.
Estimate the premiumUnderstand which mortgage insurance protects the lender, which coverage is optional for the borrower, how insured-mortgage premiums work, and where to go for calculators, local guidance, policy comparisons, or a protection quote.
In Canada, “mortgage insurance” most often means mortgage default insurance required for an eligible mortgage with less than 20% down. It protects the lender—not the homeowner. Mortgage life, disability, critical illness, and job-loss insurance are separate optional products.
The products may appear in the same mortgage transaction, but they have different purposes, beneficiaries, approval processes, and costs.
Required for many eligible mortgages with less than 20% down. It protects the lender against borrower default and helps qualified buyers access high-ratio financing.
Estimate the premiumMay reduce or pay the insured mortgage after an approved death claim. Disability, critical illness, and job-loss benefits may also be offered under separate certificate terms.
Review mortgage life insuranceCoverage owned separately from the lender. Personal policies may offer selected benefits, eligible named beneficiaries, portability, and broader household uses.
Review personal coverage planningHome insurance covers specified property and liability risks, while title insurance addresses specified ownership and title risks. Neither replaces mortgage default insurance, mortgage life insurance, personal life insurance, or disability coverage.
These are federal minimum down-payment rules for eligible residential purchases. Lenders and insurers may require more based on the borrower, property, credit, or program.
| Purchase or mortgage situation | Down-payment framework | Default-insurance position | Borrower planning point |
|---|---|---|---|
| Home priced at $500,000 or less | Federal minimum down payment is generally 5%. | A mortgage above 80% loan-to-value will typically require default insurance. | Keep closing costs, premium tax, repairs, and emergency savings separate from the down payment. |
| More than $500,000 and below $1.5 million | 5% of the first $500,000 plus 10% of the portion above $500,000. | Eligible high-ratio financing may be insured, subject to lender and insurer approval. | Higher-cost markets can require substantial cash even at the minimum percentages. |
| $1.5 million or more | At least 20% down under the federal insured-mortgage framework. | High-ratio government-backed default insurance is not available at or above the price cap. | Low-ratio lender, appraisal, qualification, and property rules still apply. |
| Eligible 30-year insured amortization | The minimum down-payment framework still applies. | Available to eligible first-time buyers and buyers of new builds, subject to lender and insurer criteria. | A longer amortization may reduce scheduled payments but generally increases total interest. |
| 20% or more down | The mortgage is generally considered low-ratio. | Borrower-paid high-ratio default insurance is generally not required, although a lender may insure a mortgage at its own cost. | Do not assume the absence of a borrower premium means the loan is never insured behind the scenes. |
Buyers do not usually select and apply to a default insurer independently. The lender or mortgage professional submits the financing file to an insurer it works with.
The lender reviews income, debts, credit, down payment, property, occupancy, and mortgage terms.
The lender submits the file to CMHC, Sagen, or Canada Guaranty according to its process and relationships.
The insurer may assess borrower qualification, documentation, appraisal, property type, location, and marketability.
The lender receives approval, conditions, decline, or a request for more documentation and communicates the result.
The premium appears in the mortgage calculation and may be financed; applicable premium tax and closing costs remain separate.
Your mortgage disclosure or commitment should identify the cost of mortgage default insurance where applicable. Ask for the base mortgage, insurance premium, financed mortgage amount, amortization, qualifying rate, scheduled payment, and cash required at closing.
Then review optional mortgage life, disability, critical illness, or job-loss insurance as a separate decision. These products require separate consent and should not be presented as a condition of mortgage approval.
Ask which insurer approved the file, the premium percentage and amount, and whether a surcharge or credit applies.
Separate down payment, premium tax, legal fees, transfer tax, adjustments, appraisal, inspection, moving, and emergency savings.
Ask whether prior insured financing, a future move, or an eligible energy-efficient home could create a premium credit or partial refund.
Compare mortgage life and personal insurance by benefit, beneficiary, underwriting, portability, exclusions, and total household need.
Mortgage default insurance is currently provided commercially by CMHC and two private insurers. Product criteria and lender relationships may affect which insurer receives the file.
Canada Mortgage and Housing Corporation is the federal Crown corporation that provides mortgage loan insurance and homebuying calculators, portability, first-time buyer, new-build, newcomer, improvement, and energy-efficiency programs.
Open the CMHC calculatorSagen is Canada’s largest private default mortgage insurer and offers lender programs for homebuyers, newcomers, rental income, renovations, energy efficiency, and other qualifying situations.
Visit SagenCanada Guaranty is a Canadian-owned private mortgage insurer offering lender-focused mortgage insurance products and homeownership resources across Canada.
Visit Canada GuarantyAsk the lender which insurer approved the file and whether any alternative insurer or program could address a documented issue. Approval is never guaranteed, and insurer criteria may differ.
A minimum down payment does not guarantee mortgage or insurance approval. Income, credit, documented funds, appraisal, property condition, access, marketability, and the exact borrower or property scenario can all affect the decision.
Income type and documentation, credit history, loans, leases, support obligations, taxes, student debt, and co-signed liabilities can affect qualification.
Qualification uses the applicable stress-test framework, while savings, investments, gifts, sale proceeds, deposits, and other permitted funds must be documented.
Supported lending value, comparable sales, foundation, roof, electrical, plumbing, heating, water damage, incomplete work, and safety issues may create conditions.
Condo, strata, leasehold, manufactured, acreage, multi-unit, seasonal, or remote properties may require specialized review of access, utilities, insurance, and marketability.
First-time buyers, new builds, newcomers, self-employed borrowers, rental suites, rural properties, condos, and energy-efficient homes may have additional documentation or program rules.
Review 30-year insured-amortization eligibility, down-payment sources, closing costs, FHSA or HBP funds, and first-home tax programs.
Confirm construction status, occupancy, builder agreement, closing timing, GST/HST treatment, appraisal, and 30-year eligibility.
Immigration status, eligibility to purchase, credit alternatives, down-payment verification, income documents, and residency rules may apply.
Business financials, tax returns, stated or qualified income, industry history, retained earnings, and down-payment source require careful documentation.
Legal status, zoning, permits, appraiser-supported rent, owner occupancy, fire separation, and insurer rental-income treatment may affect qualification.
Year-round access, marketability, land value, water, septic, heating, outbuildings, zoning, and property size may be reviewed.
Fees, insurance, deductible, reserve fund, minutes, litigation, special assessments, property condition, and marketability may matter.
Eligible CMHC-insured buyers may qualify for a partial premium refund when the property and documentation satisfy the current Eco Plus criteria.
Portability is not automatic. The new lender must identify the existing insurer and submit the new mortgage under the insurer’s current borrower, property, timing, loan-to-value, and amortization rules.
Ask the current lender whether the mortgage is insured by CMHC, Sagen, or Canada Guaranty and keep the available reference details.
Premium credits can depend on the elapsed time between the original insured closing and the new insurance request.
A larger mortgage, higher loan-to-value, different property, or extended amortization may create a top-up premium or different eligibility treatment.
Have the new lender calculate any available portability treatment before assuming the prior insured mortgage has no remaining premium value.
The uploaded mortgage-loan-insurance guidance notes that insurer credits may depend on timing, the new loan, property, mortgagors, amortization, and loan status. The lender’s submitted file and insurer decision control the actual result.
The minimum down-payment framework is federal, but cash-to-close, property review, affordability, and optional protection needs vary by location.
Ontario buyers should account for land transfer tax and available first-time buyer relief. Toronto properties may also face municipal land transfer tax. GTA affordability should include condo fees, parking, childcare, commuting, and property tax.
Review Ontario guidanceB.C. buyers should review property transfer tax, available exemptions, strata documents, special assessments, wildfire or flood concerns, and high-balance qualification in Metro Vancouver, Fraser Valley, Victoria, and Kelowna.
Review British Columbia guidanceCalgary, Edmonton, Red Deer, and smaller communities may involve detached-home utilities, vehicles, land-title charges, sector-sensitive income, secondary suites, and larger maintenance budgets.
Review Alberta guidanceInclude notarial work, municipal transfer duties, property tax, heating, condo costs, and French-language transaction documents. Confirm current provincial buyer and new-home measures.
Review household protectionDeed or transfer charges, older-home condition, oil or electric heating, storm exposure, wells, septic systems, and seasonal employment may affect qualification and the first-year budget.
Review pricing and protection factorsInsurability may depend on year-round access, appraisal evidence, marketability, utilities, water, septic, heating, zoning, outbuildings, acreage, and the property’s residential use.
Prepare a location-based comparisonMortgage default insurance does not make scheduled payments for the borrower. Contact the lender or servicer promptly to discuss tailored mortgage-relief options.
Also check whether you separately purchased disability, critical illness, or job-loss insurance that may support an eligible claim under its certificate.
Provide the mortgage number, payment date, income change, arrears status, budget, and expected duration of the difficulty.
Confirm payment deferral, amortization change, capitalization, interest effect, fees, credit reporting, and future payment impact.
Check the insurer, event definition, waiting period, claim deadline, exclusions, employment status, and required evidence.
Save employee names, dates, reference numbers, documents, agreements, claim submissions, and the lender’s final decision.
Use the route that matches default insurance, first-time buying, optional mortgage protection, pricing, or policy comparison.
Estimate the mortgage default-insurance premium by price, down payment, and amortization.
Use the calculatorReview down-payment rules, 30-year amortization, closing costs, buyer programs, and optional coverage.
Open the buyer guideUnderstand optional lender-connected death coverage, declining benefits, premiums, and lender changes.
Open the mortgage life guideBuild coverage around the mortgage, income replacement, dependants, debts, and household expenses.
Open the personal coverage guideCompare beneficiary control, level or declining benefits, portability, underwriting, and renewal.
Compare the productsReview default premiums separately from optional life, disability, critical illness, and job-loss pricing.
Open the pricing guidePrepare mortgage, household, location, existing-coverage, beneficiary, and term details.
Compare quote optionsReview disability definitions, waiting periods, payment limits, benefit periods, exclusions, and claim requirements.
Open the disability guideUnderstand covered-condition definitions, survival periods, benefit limits, exclusions, and how the mortgage benefit may be applied.
Open the critical illness guideReview eligibility, involuntary job-loss definitions, waiting periods, maximum payments, exclusions, and claim evidence.
Open the job-loss guideRead direct answers about default insurance, optional protection, premiums, claims, and cancellation.
Open the FAQ hubDefault-insurance approval, premium, portability, refunds, amortization, and property eligibility depend on the lender, insurer, and financing file.
Optional mortgage life or creditor insurance is a separate agreement. Confirm consent, charges, benefit, eligibility, exclusions, effective date, cancellation, and claims in writing.
Direct answers about default insurance, premiums, insurers, down payments, optional coverage, lender changes, and payment difficulty.
The term usually means mortgage default insurance, which protects the lender when an eligible borrower has a down payment below 20%. It may also be used informally for optional mortgage life, disability, critical illness, or job-loss insurance, which are different products.
Mortgage default insurance protects the lender against losses if the borrower defaults. It does not pay the borrower’s mortgage after death, disability, illness, or job loss.
It is generally required for an eligible mortgage when the down payment is below 20%. Lender, borrower, property, purchase-price, amortization, and insurer criteria still apply.
Federal consumer guidance states that premiums generally range from 0.6% to 4.5% of the mortgage amount. The actual rate depends mainly on loan-to-value and the insured program, and surcharges or credits may apply.
The one-time premium can generally be paid up front or added to the mortgage balance. Financing it means paying mortgage interest on the premium. Applicable provincial sales tax must be paid separately.
The mortgage lender or broker generally submits the application to an insurer it works with. Ask which insurer approved the file and whether another available insurer or program could address a documented qualification issue.
Portability may reduce or eliminate part of the premium on eligible subsequent insured financing, subject to the insurer’s rules, timing, new mortgage amount, amortization, borrower changes, and lender submission.
No. Mortgage life, disability, critical illness, and job-loss insurance are optional and separate from mortgage approval. Federally regulated institutions must obtain express consent before adding optional coverage.
Default insurance protects the lender against borrower default and may be required below 20% down. Mortgage life insurance is optional and generally pays the lender after an approved death claim to reduce the insured mortgage.
It does not make scheduled payments for the borrower. Contact the lender promptly about mortgage-relief options and check whether separately purchased disability, critical illness, or job-loss insurance may support an eligible claim.
These are two different decisions. Choose the path that matches what you are trying to calculate or protect.
Use this route when you are planning a purchase with less than 20% down and want to understand the approximate default-insurance cost added to the mortgage.
Use this route when you want to compare optional mortgage life, personal life, disability, critical illness, or job-loss protection for your household.
Questions about the actual default-insurance approval, insurer, premium, conditions, or closing figures should go to the lender or mortgage professional handling your application.
This page provides general educational information and is not a mortgage approval, insurance approval, legal, tax, financial, or lending recommendation. Eligibility, premiums, benefits, exclusions, and availability depend on the lender, insurer, property, application, and issued documents.