Mortgage insurance in Canada is designed to protect lenders in the event that a homeowner defaults on their mortgage. It is typically required if you’re buying a home with a down payment of less than 20% of the home’s purchase price. The Canada Mortgage and Housing Corporation (CMHC), along with private insurers are the main providers of this type of insurance.
Premiums are calculated as a percentage of the mortgage amount and can be paid in a lump sum or added to the mortgage and included in the payments. For those purchasing energy-efficient homes or making green renovations, there are government incentives available that may refund a portion of the mortgage insurance premiums.
Allows for the purchase of a home with a lower down payment, as little as 5% of the purchase price.
Provides access to reasonable interest rates, even with smaller down payments.
Helps stabilize the housing market, particularly during economic downturns, by ensuring the availability of mortgage funding.
Facilitates entry into the housing market for Canadians, which can be especially beneficial for first-time homebuyers.