Published 2 November 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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In Ontario, CMHC mortgage default insurance is required when you put less than 20% down on a home under $1.5 million. It costs 2.80% to 4.00% of the loan for most buyers, added to the mortgage, plus 8% Ontario sales tax paid in cash at closing. A 30-year amortization adds 0.20%.
This guide is for Ontario buyers who plan to put less than 20% down and want to know what mortgage default insurance will actually cost. You will get the current CMHC premium table, worked examples using real GTA prices, the Ontario sales tax you must pay in cash, and the rules on when insurance is required, as of November 2026.
What is mortgage default insurance?
Mortgage default insurance protects the lender, not you. If a borrower stops paying and the sale of the home does not cover the debt, the insurer pays the lender’s loss. In return, lenders can offer mortgages with as little as 5% down, often at lower interest rates than uninsured loans.
People often call it “CMHC insurance” because the Canada Mortgage and Housing Corporation is the best-known insurer. Lenders can also use private insurers, Sagen and Canada Guaranty. Your lender picks the insurer and handles the application. You do not shop for it yourself.
Do not confuse it with mortgage life or disability insurance. Those are optional products that pay your mortgage if you die or cannot work. Default insurance is a different thing and, below 20% down, it is not optional.
When do you need CMHC insurance in Ontario?
You need it when your down payment is less than 20% of the purchase price. FCAC also notes that a lender may require it even with 20% down, usually for self-employed borrowers or people with weak credit.
To qualify for an insured mortgage, all of these must be true as of November 2026:
- The purchase price is under $1.5 million. The cap rose from $1 million on 15 December 2024.
- Your down payment meets the minimum: 5% of the first $500,000 and 10% of the portion from $500,000 up to $1.5 million.
- The home is your own, or a close relative’s, home to live in. CMHC covers owner-occupied properties of one to four units.
- You meet the insurer’s debt limits. For CMHC, housing costs cannot exceed 39% of gross income and total debts cannot exceed 44%, tested at the greater of your rate plus 2 points or 5.25%.
- At least one borrower has a credit score of 600 or more, under CMHC’s rules.
At $1.5 million and above, insurance is not available and you need at least 20% down. For the exact minimum at your price, see my guide to the minimum down payment in Ontario.
How much does CMHC insurance cost?
The premium is a percentage of your mortgage amount, not the purchase price. The less you put down, the higher the rate. These are CMHC’s current rates for owner-occupied homes.
| Loan-to-value (loan as % of price) | Down payment | Premium on the loan |
|---|---|---|
| Up to 65% | 35% or more | 0.60% |
| 65.01% to 75% | 25% to under 35% | 1.70% |
| 75.01% to 80% | 20% to under 25% | 2.40% |
| 80.01% to 85% | 15% to under 20% | 2.80% |
| 85.01% to 90% | 10% to under 15% | 3.10% |
| 90.01% to 95% | 5% to under 10% | 4.00% |
| 90.01% to 95%, non-traditional down payment | Borrowed down payment | 4.50% |
Source: CMHC, mortgage loan insurance premiums (owner-occupied, 1–4 units), as of November 2026. A 30-year amortization adds 0.20% to the rate.
For a buyer with under 20% down, the realistic range is 2.80% to 4.00% of the loan. The lower tiers apply only when the loan is 80% of the value or less.
The 30-year surcharge
If you are a first-time buyer or buying a new build and choose a 30-year amortization, CMHC adds 0.20% to the premium rate. So 4.00% becomes 4.20%. My guide to how much home you can afford in the GTA shows how the premium fits into the full qualifying picture.
Do you pay sales tax on CMHC insurance in Ontario?
Yes. Ontario is one of the provinces where provincial sales tax applies to mortgage default insurance premiums, along with Quebec and Saskatchewan. Ontario’s retail sales tax on insurance premiums is 8%.
The key detail: CMHC says the provincial tax cannot be added to your mortgage. The premium itself is rolled into the loan, but the tax must be paid in cash, normally through your lawyer at closing. On a $25,000 premium, that is $2,000 you need on top of your down payment. Many first-time buyers miss it. Add it to your list of closing costs early.
Free tool — what can you actually afford?
What does CMHC insurance cost on a typical GTA home?
Here are worked examples using median sold prices from January to October 2026, from TRREB MLS data via REALM. All use a 25-year amortization. Your actual premium will be set by your lender.
| Home (2026 median) | Down payment | Loan | Premium rate | Premium added to loan | 8% tax (cash) |
|---|---|---|---|---|---|
| Brampton condo apartment, $415,000 | 5%: $20,750 | $394,250 | 4.00% | $15,770 | $1,262 |
| Brampton condo apartment, $415,000 | 10%: $41,500 | $373,500 | 3.10% | $11,578 | $926 |
| Mississauga condo townhouse, $689,300 | Minimum: $43,930 | $645,370 | 4.00% | $25,815 | $2,065 |
| Mississauga condo townhouse, $689,300 | 15%: $103,395 | $585,905 | 2.80% | $16,405 | $1,312 |
| Markham freehold townhouse, $999,990 | Minimum: $74,999 | $924,991 | 4.00% | $37,000 | $2,960 |
| Vaughan detached, $1,415,000 | Minimum: $116,500 | $1,298,500 | 4.00% | $51,940 | $4,155 |
Source: my calculations; prices from TRREB MLS data via REALM, January–October 2026; premium rates from CMHC. Figures rounded to the dollar. Illustration only.
Notice the Mississauga example. Going from the minimum down payment to 15% cuts the premium from $25,815 to $16,405, a saving of about $9,400, plus less tax. Every tier you cross matters, and the cut-offs are sharp: 90.01% pays 4.00%, while exactly 90% pays 3.10%.
The hidden cost: interest on the premium
Because the premium is added to the mortgage, you also pay interest on it. On the $25,815 Mississauga premium, at an illustrative 4.44% over 25 years, that is about $142 a month and roughly $16,800 of interest over the full amortization if the rate never changed.
What counts as a down payment for an insured mortgage?
Where your down payment comes from changes both whether you qualify and which premium you pay. CMHC splits sources into two groups.
Traditional down payment
This is money from your savings, the proceeds of selling another property, or a non-repayable gift from a relative. FCAC adds that the minimum normally has to come from your own funds. A gift must be a true gift that never has to be paid back. My guide to a gifted down payment in Ontario covers the paperwork.
Non-traditional (borrowed) down payment
CMHC allows some borrowers to use arm’s-length borrowed money, such as an unsecured personal loan or line of credit, for the down payment. It applies only to one- and two-unit homes with 5% to under 10% down, and only for borrowers with a strong credit history. The cost is a higher premium: 4.50% instead of 4.00%. Borrowing your down payment also adds a monthly debt that counts against your total debt limit, so it can shrink the mortgage you qualify for.
Three- and four-unit homes
If you are buying a triplex or fourplex to live in, CMHC caps the loan at 90% of the value, so you need at least 10% down. One- and two-unit homes can go to 95%.
Is it worth putting 20% down to avoid CMHC insurance?
Not always. Avoiding the premium is good, but it is not the only factor:
- Rates. Insured mortgages usually get lower interest rates than uninsured ones, because the lender is protected. That can offset part of the premium.
- Time. Saving the extra down payment can take years. If prices rise in that time, you may lose more than the premium. If prices fall, as GTA condo medians did in 2026, waiting may help. No one can be sure which way it goes.
- Cash cushion. Emptying every account to reach 20% leaves nothing for repairs, moving or a job loss.
- Price limit. At $1.5 million and above, you have no choice: 20% is required.
I tell clients to look at the tier they are close to, not just at 20%. Moving from 9% to 10% down, or from 14% to 15%, can save thousands for a relatively small amount of extra cash. If a family gift or your FHSA can get you over a line, run the numbers both ways. Then confirm with a licensed mortgage professional, because the premium is only one part of the total cost of the mortgage.
Can you get a CMHC premium refund or avoid paying it again?
There are a few ways the premium can work in your favour:
- Energy-efficient homes. CMHC says a refund of up to 25% of the premium may be available when insurance finances an energy-efficient home. Ask your lender how to apply.
- Porting. If you move and port your insured mortgage, CMHC charges a separate, higher rate only on the increase in the loan amount. My guide to porting your mortgage explains how it works.
- Switching at renewal. FCAC warns that a new premium may apply if you switch lenders and increase your loan or extend your amortization. A straight switch with no changes usually avoids that.
The premium is not refunded if you sell or pay off the mortgage early. If you expect to sell within a couple of years, the premium is a real, sunk cost. Also make sure the 8% sales tax is in your closing budget. Your lawyer will ask for it before closing, and it cannot be added to the mortgage.
What to do next
- Work out your loan-to-value and see which premium tier you fall in.
- Check whether a little more down payment would drop you into a cheaper tier.
- Add the 8% Ontario sales tax on the premium to your cash-to-close budget.
- Look at first-time buyer programs in Ontario that can boost your down payment.
- Get a pre-approval and confirm the exact premium with a licensed mortgage professional. This article is general information, not financial advice.
Need help with this? Talk to me.
I’m Jatin Dua, Broker of Record at RE/MAX Quantum Realty, and I’m the best agent to do this kind of work for you in Toronto and across the GTA. Over $100 million in GTA sales and 100+ families helped sell. Feel free to contact me any time: call or text 833-330-1925 or email [email protected].
Frequently asked questions
How much is CMHC insurance in Ontario?
CMHC insurance in Ontario costs 2.80% to 4.00% of the mortgage amount for most buyers with under 20% down, as of November 2026. The rate is 4.00% with 5% to under 10% down, 3.10% with 10% to under 15%, and 2.80% with 15% to under 20%. Ontario adds 8% sales tax, paid in cash.
Is CMHC insurance required in Ontario?
Yes, if your down payment is under 20% of the price. In Ontario and the rest of Canada, mortgage default insurance is required on those loans, and only homes under $1.5 million qualify. A lender can also require it with 20% down, usually for self-employed borrowers or people with weak credit.
Is PST charged on CMHC insurance in Ontario?
Yes. Ontario charges 8% provincial sales tax on mortgage default insurance premiums. CMHC says the tax cannot be added to the mortgage, so you pay it in cash, usually through your lawyer at closing. On a $25,815 premium, the tax is about $2,065.
How is the CMHC premium calculated?
The CMHC premium is your mortgage amount multiplied by a rate based on your loan-to-value ratio. For example, a $689,300 Mississauga condo townhouse with the $43,930 minimum down has a $645,370 loan at 93.6% loan-to-value, so the 4.00% rate gives a $25,815 premium, added to the mortgage.
Can I add the CMHC premium to my mortgage?
Yes. In Canada the CMHC premium is normally added to your mortgage balance, so you do not pay it upfront. You then pay interest on it for the life of the loan. In Ontario, the 8% sales tax on the premium cannot be added and must be paid in cash at closing.
Does a 30 year amortization increase CMHC premiums?
Yes. CMHC adds 0.20% to the premium rate for an eligible 30-year amortization, available to first-time buyers and buyers of new builds as of November 2026. With 5% down, the rate rises from 4.00% to 4.20% of the loan, or about $1,300 more on a $645,000 mortgage.
Is CMHC insurance refundable if I sell my house?
No. The CMHC premium is a one-time charge and is not refunded if you sell or pay off the mortgage early. If you buy again and port your mortgage, CMHC can charge a separate rate only on the increase. A refund of up to 25% may be available for energy-efficient homes.
What is the difference between CMHC, Sagen and Canada Guaranty?
All three provide mortgage default insurance in Canada. CMHC is the federal housing agency, while Sagen and Canada Guaranty are private insurers. Your lender chooses the insurer and applies for you, so you do not shop for it. The federal rules on the $1.5 million price cap, minimum down payment and stress test apply either way.
Can I avoid CMHC insurance with less than 20% down?
Generally no. In Canada, mortgage default insurance is typically required when your down payment is under 20%, according to the Financial Consumer Agency of Canada. The practical ways to avoid it are to reach 20% down, for example with savings, an FHSA or a family gift. Speak with a licensed mortgage professional in Ontario about your options.
Sources
- CMHC: Mortgage loan insurance cost
- CMHC: Purchase (homeowner mortgage loan insurance eligibility and premiums)
- CMHC: Revises homeowner mortgage loan insurance premiums (30-year surcharge)
- FCAC: How much you need for a down payment
- Ontario: Retail sales tax on insurance and benefits plans
- Department of Finance Canada: Delivering the boldest mortgage reforms in decades
- FCAC: Renewing your mortgage
- Ratehub: PST on CMHC insurance
Related reading
- The Bank of Canada Raised Rates: What It Means for GTA Buyers, Sellers and Owners
- Variable-Rate Mortgage After the Hike: How Much Your Payment Changes
- Should I Lock In My Variable Mortgage Before 2027?
- Mortgage Renewal in 2027 After the Rate Hike: Your Options in Ontario
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. I work with buyers and sellers across Toronto and the GTA and have helped more than 100 families sell. Four-plus years of active GTA transactions and over $100 million in sales volume.
Reach me at [email protected] or 833-330-1925, or book a call.