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Estimate my property →If you're buying a home in Quebec with less than 20% down, you'll need to pay mortgage insurance. This added cost — typically 4% of the mortgage amount on a 5% down payment — is a significant expense that many buyers overlook. With a Bank of Canada policy rate at 2.75%, a 5-year fixed rate around ~3.69%, and a variable rate near ~3.35%, understanding mortgage insurance is essential to plan your purchase wisely.
🏦 What Is CMHC Mortgage Insurance?
CMHC (Canada Mortgage and Housing Corporation) mortgage insurance protects your lender — not you — in case you default on your mortgage. It's mandatory whenever your down payment is less than 20% of the property's purchase price. The premium is added to your mortgage balance and paid over the life of the loan.
💡 Key distinction: Mortgage insurance protects the lender, not the borrower. It's different from mortgage life insurance, which covers your balance if you pass away.
✅ Mandatory — Required for down payments below 20%
✅ Added to mortgage — Premium is rolled into your mortgage balance
✅ One-time payment — No monthly premium; it's amortized over the loan
✅ Maximum property value — Insured mortgages limited to properties under $1,500,000
💳 Minimum Down Payment Rules in Quebec
The minimum down payment in Canada follows a tiered structure based on the purchase price:
✅ Up to $500,000 — Minimum 5% down payment
✅ $500,001 to $999,999 — 5% on the first $500K + 10% on the remainder
✅ $1,000,000 to $1,499,999 — Same tiered structure applies
✅ $1,500,000 and above — Minimum 20% down (no insurance available)
Examples by property type (QPAREB data)
Condo at $432,000
5% down: $21,600
Insurance required: Yes
Single-family at $625,000
Minimum down: $37,500
5% on $500K + 10% on $125K
💡 Tip: for a single-family home at $625,000, the minimum down payment is $37,500 (5% on $500K = $25,000 + 10% on $125K = $12,500). This is higher than a flat 5% would be ($31,250).
🛡️ How to Avoid Mortgage Insurance
The only way to avoid CMHC insurance entirely is to put 20% or more down. Here are strategies to help you reach that threshold:
1. 🏦 HBP + FHSA — Combine the Home Buyers' Plan ($60,000) and FHSA ($40,000) for up to $100,000 per person
2. 💰 Gifted down payment — Parents can gift funds for your down payment (documentation required)
3. 🏠 Buy with a partner — Two buyers can combine resources to reach 20%
4. 📉 Lower price range — Consider condos or properties in emerging neighbourhoods
🧮 Calculate how much you need to save
Free property estimate →⚠️ Consider the trade-off: saving for 20% down takes longer, and during that time, property prices may rise. Sometimes paying the insurance premium and buying sooner can be more advantageous than waiting.
📊 CMHC vs Sagen vs Canada Guaranty
Canada has three mortgage insurers. While CMHC is the most well-known, all three offer equivalent coverage and identical premium rates:
🇨🇦 CMHC
Government-owned (Crown corporation)
Most widely used insurer
Portability available
🏢 Sagen
Private insurer (formerly Genworth)
Same premium rates as CMHC
Competitive on self-employed
🏢 Canada Guaranty
Private insurer
Same premium rates as CMHC
Good alternative for niche cases
💡 Good to know: you don't choose your insurer — your lender does. However, the premium rates are identical across all three, so there's no cost difference for the borrower.
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