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.

Feb. 02, 2022

Originally posted June 5, 2014

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 the provider they use.

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.