CMHC and Sagen

What if you have less than 20% for a down payment?

These insurance providers provide high-ratio mortgage access to help you buy a home.

Have a lower down payment?

Your mortgage can still happen (for a fee).

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: the Canadian Mortgage and Housing Corporation, (CMHC), Sagen, or Canada Guaranty. The CMHC is a Crown corporation and the most well-known, and the latter two are private companies.

But even though costs are involved, there are some benefits of an insured high-ratio mortgage:

  • Enables you to purchase a home with as little as 5% down (price restrictions apply), which helps get more Canadians into home ownership and the real estate market.
  • Allows access to lower mortgage interest rates than would otherwise be afforded, because the mortgage is secured for lenders.
  • There may be less admin fees associated with an insured 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%

For more information, here are the website links:

CMHC
Sagen
Canada Guaranty

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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