CMHC: What Is It and Why Does It Matter for Your Mortgage?
Planiprêt
Nov 24, 2025
You want to buy a home but don’t have the required 20% down payment? Good news: there’s a way to access homeownership sooner through CMHC mortgage insurance. But what exactly is CMHC? Why is this insurance mandatory? And what are its pros and cons? Here’s everything you need to know.
What Is CMHC?
CMHC (Canada Mortgage and Housing Corporation) is a Crown corporation created by the federal government. Its mission? To stabilize the housing market and make homeownership more accessible. CMHC is Canada’s leading provider of mortgage loan insurance, as well as housing programs and market analysis.
Why Does CMHC Mortgage Insurance Exist?
In Canada, any mortgage with a down payment of less than 20% must be insured. This requirement protects lenders against default.
With CMHC insurance, you can buy a home with as little as 5% down, making homeownership more attainable.
Eligibility Criteria for an Insured Mortgage
- Minimum down payment:
- 5% on the first $500,000
- 10% on the portion between $500,000 and $1,000,000
- Maximum property price: $1,000,000
- Maximum amortization: 25 years
- Must be a primary residence
How Much Does CMHC Insurance Cost?
The insurance premium is calculated as a percentage of the mortgage amount and varies based on your down payment:
- 5% down payment → premium about 4%
- 10% down payment → premium about 3.1%
- 15% down payment → premium about 2.8%
Example: For a $400,000 home with 5% down, the premium will be approximately $15,200, added to your mortgage.
Pros and Cons of CMHC Insurance
Advantages
- Allows you to buy sooner with a smaller down payment
- Access to competitive interest rates
- Helps maintain market stability
Disadvantages
- Additional cost (insurance premium)
- Stricter qualification rules
Is It Worth It for You?
If you don’t have the 20% down payment, CMHC insurance is often the best way to access homeownership quickly. In a market where home prices and interest rates may rise, buying now could save you thousands in the long run.
As accredited mortgage brokers, we analyze your situation to find the most advantageous solution. Contact us today for a free, personalized consultation!
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