CMHC, Sagen and Canada Guaranty
What if you have less than 20% for a down payment?
These insurance providers allow access to high-ratio mortgages to help you buy a home.
Have a lower down payment?
Your mortgage can still happen for a fee (but also with a lower rate).
If you want to buy your home or property in Canada with a down payment of less than 20% of the purchase price (called a high-ratio mortgage), it can only happen through mortgage default insurance.
This type of insured mortgage helps protects the lender against borrower default. Like any insurance, there is a premium involved which is usually passed onto the borrower.
There are currently three mortgage insurance providers in Canada:
- Canadian Mortgage and Housing Corporation (CMHC)
- Sagen
- Canada Guaranty
CMHC is a Crown corporation and the most well-known, and the latter two are private companies. Your lender will arrange for the purchase of your mortgage insurance with their preferred provider.
- Purchase
- Switch / Renew
Payments of
- Required mortgage insurance
- $16,150
- Total mortgage required
- $419,900
- Interest paid over term
- $36,384
- Principal paid over term
- $68,986
- Balance at end of term
- $350,932
Determine Your Payments
Payments of
- Interest paid over term
- $36,384
- Principal paid over term
- $68,986
- Balance at end of term
- $350,932
Various tools and functions of this website perform calculations and provide cost estimates. These tools are designed for illustrative purposes only and make many assumptions that may not reflect all situations. Please use these tools in collaboration with a True North Mortgage agent. True North Mortgage does not guarantee the accuracy, reliability or completeness of these tools or calculations.
Benefits of an insured high-ratio mortgage:
- Despite the added insurance costs, a home can be purchased with as little as 5% down (price restrictions apply) — which helps more Canadians to become homeowners and access the real estate market.
- Lower mortgage interest rates are usually offered compared to conventional mortgages (more than 20% down), because the loan is secured for lenders.
- Less admin fees may apply for this type of mortgage.
What will default insurance cost you?
The premium payable is based on a percentage of the home’s purchase price (may vary by provider), and the exact cost will be provided when you apply for a mortgage. It can be paid in a single lump sum or it can be added to your mortgage loan amount and included in your monthly payments.
Here's a list of what the CMHC currently charges for insurance premiums:
| Loan-to-Value | Premium on Total Loan | |
|---|---|---|
| Up to and including 65% | 0.60% | |
| Up to and including 75% | 1.70% | |
| Up to and including 80% | 2.40% | |
| Up to and including 85% | 2.80% | |
| Up to and including 90% | 3.10% | |
| Traditional Down Payment | Up to and including 95% | 4.00% |
| Non-Traditional Down Payment | 4.50% |
Want all of your insurance questions outlined, the easy way?
Connect with us online, over the phone, or walk into a convenient store location, and we'll happily help you through this process, while providing expert advice. Plus, we'll get your best possible rate, to save you even more on your high-ratio mortgage.
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