Mortgage Default Insurance

Mortgage default insurance or mortgage insurance is mandatory in Canada on mortgages with a down payment between 5% and 19.99%. This insurance provides Canadians, with less than a 20% down payment, access to the Canadian real estate market.

Mortgage default insurance protects the lender and investor and indirectly benefits the homeowner.

Because of mortgage default insurance, lenders are able to offer lower mortgage rates because some mortgages are protected by mortgage default insurance and the risk of default is passed along to the mortgage insurer.

The cost of mortgage default insurance depends on two factors:

  • The type of mortgage applied for
  • The amount of the down payment

This type of insurance typically costs homebuyers 2.80% - 4.00% of their mortgage amount.

To find out more, visit CMHC website

Mortgage Default Insurance Brochure