Mortgage default insurance in Canada: 2026 premiums and rules

Who mortgage default insurance protects

Mortgage default insurance protects the lender. If you default and the lender loses money on the sale, the insurer covers the lender's loss. You still owe the debt, and the insurer can come after you for any shortfall.

It's different from mortgage life insurance and job-loss insurance, and it doesn't let you walk away from the mortgage. Mortgage life and job-loss insurance are separate products, and they're the ones that protect you.

Canada has 3 default insurers: CMHC, the federal Crown corporation, and 2 private insurers, Sagen and Canada Guaranty. Their premium schedules are effectively identical, and the lender chooses which one to use.

So why pay for insurance that protects someone else? It's mandatory with less than 20% down, and it gets you a lower interest rate. Both are explained below.

The 2026 premium rates

The premium is a percentage of the mortgage amount, not the purchase price. It steps up at fixed loan-to-value thresholds.

| Down payment | Loan-to-value | Premium | |---|---|---| | 5% to 9.99% | 90.01% to 95% | 4.00% | | 10% to 14.99% | 85.01% to 90% | 3.10% | | 15% to 19.99% | 80.01% to 85% | 2.80% | | 20% or more | 80% or less | None |

Add 0.20% if the amortization is longer than 25 years.

Here's an example at Edmonton's average price. A $470,000 home with 5% down means a $23,500 down payment and a $446,500 mortgage. At 4.00%, the premium is $17,860, and the total mortgage becomes $464,360.

The premium is added to your mortgage balance, so you don't pay it in cash. Because you finance it, you also pay interest on it for the life of the loan. That makes the total cost higher than the premium alone, so look at how it changes your payment, too.

Watch the thresholds. At 9.99% down you pay 4.00%. At 10.00% you pay 3.10%. On a $450,000 purchase, finding a few hundred dollars more to cross that line saves roughly $4,000.

Who qualifies for default insurance

Default insurance isn't available on every mortgage, and these rules decide which pricing tier you land in.

The purchase price must be under $1,500,000. Above that, insurance isn't available and the minimum down payment is 20%.

You must live in the property. In limited cases, that includes a small multi-unit building you live in. A pure rental can't be insured.

The maximum amortization is 25 years, with one big exception. Since December 2024, all first-time buyers and all buyers of newly built homes can take 30 years on an insured mortgage. The extra 0.20% premium surcharge covers that.

A refinance can't be insured. If you're taking equity out, you're in the uninsured tier no matter how much equity you have. That's why people who refinance often see a higher rate, even when rates overall haven't moved.

The minimum down payment follows the price bands: 5% up to $500,000, then 10% on the portion from $500,000 to $1.5M.

Why insured mortgage rates are lower

A lender holding an insured mortgage doesn't carry the risk of a credit loss, because the insurer covers it. Insured mortgages can also be pooled and securitized through government-backed programs, which costs less than funding them from the lender's own balance sheet.

Lenders pass both savings through in the rate. As a result, a buyer with 5% down often gets a lower interest rate than a buyer with 20% down on the same house.

That doesn't mean you should put less money down. The premium almost always costs more than the rate saving: $17,860 of premium against a rate difference worth a few thousand dollars over 5 years. But it does mean stretching to hit 20% down isn't automatically the right move. It removes a premium you'd have financed anyway, and it moves you into a higher-priced rate tier. Run the numbers both ways.

Insured, insurable and uninsured rates

These 3 terms describe the 3 price tiers on any Canadian rate board. Knowing which one you're in tells you which rates on this site apply to you.

Insured. Less than 20% down, premium paid, insurance in place. Priced below the other 2 tiers.

Insurable. 20% or more down, on a purchase the lender could still insure behind the scenes through a bulk portfolio policy (under $1.5M, 25-year amortization, owner-occupied). You pay no premium. The lender gets cheaper funding and prices these between the other 2 tiers.

Uninsured. The mortgage can't be insured at all: a refinance, a rental, a property over $1.5M, or an amortization over 25 years that doesn't qualify for the first-time buyer or new-build exception. Priced above the other 2 tiers.

Two surprises come up often. A buyer with 20% down finds out they're insurable, not uninsured, and gets a better rate than expected. Or a homeowner with 45% equity refinances and finds that all that equity doesn't get them an insured rate, because refinances are excluded outright.

Alberta doesn't charge PST on the premium

The premium is the same everywhere in Canada. The tax on it isn't.

In Ontario, Quebec, Saskatchewan and Manitoba, provincial sales tax applies to the default insurance premium. It's due in cash at closing, and it can't be added to the mortgage. On an $18,000 premium in Ontario, that's about $1,450 due on possession day, when most buyers have already committed every dollar of cash.

Alberta doesn't charge it. Neither do British Columbia, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island or the territories. But Alberta is the only large market with no PST on the premium and no land transfer tax at all.

Together, an Alberta first-time buyer at $470,000 with 5% down avoids roughly $1,450 of premium tax and roughly $5,000 to $6,000 of land transfer tax, compared with the same purchase in Ontario. That's why the cash-to-close math works here for households it doesn't work for elsewhere.

To see your own numbers, run your price and down payment through the default insurance calculator. It shows the premium, the effect on your payment and any sales tax due in cash. It uses the current premium rates and provincial tax rules, and it shows the 30-year surcharge separately so you can see what the longer amortization costs.