Canada mortgage default insurance changes in 2027: what buyers need to know
Canada's mortgage default insurance rules have shifted again in 2027. CMHC, Sagen, and Canada Guaranty now cover purchases up to $1.5 million, new 30-year amortizations apply to insured mortgages for first-time buyers, and premium rates remain tiered by LTV. This guide explains what changed, who benefits, and how to calculate your premium.
Two major rule changes have reshaped Canada's insured mortgage landscape: the purchase price cap jumped to $1.5 million in late 2024, and 30-year amortizations are now available to first-time buyers and new construction purchasers. Here is what those changes mean for your premium, payments, and qualification.
What changed: key 2024–2027 rule updates
Effective Dec 2024. Buyers up to $1.5M can now access insured mortgage rates with less than 20% down.
First-time buyers and all new construction buyers can now amortize over 30 years — vs 25 years previously.
4.00% / 3.10% / 2.80% tiers unchanged since 2017. PST on premiums still applies in ON, QC, SK, MB.
Contract rate + 2% or 5.25% floor — whichever is higher. Still applies to all insured mortgages.
2027 CMHC premium table
| Down payment | LTV | Premium rate | Premium on $600,000 loan | Total mortgage after premium |
|---|---|---|---|---|
| 5% ($31,578) | 95% | 4.00% | $24,000 | $624,000 |
| 10% ($66,666) | 90% | 3.10% | $18,600 | $618,600 |
| 15% ($105,882) | 85% | 2.80% | $16,800 | $616,800 |
| 20%+ | ≤80% | None | $0 | $600,000 |
Based on $630,000 purchase price. PST on premium is additional and paid at closing (Ontario 8% = $1,920 on $24,000 premium). Source: CMHC premium rates.
30-year vs 25-year amortization on an insured mortgage
| Amortization | Monthly payment | Total interest paid | Eligible buyers |
|---|---|---|---|
| 25 years | $2,950/mo | ~$285,000 | All insured borrowers |
| 30 years | $2,716/mo | ~$347,000 | First-time buyers; new construction only |
Based on $500,000 insured mortgage at 5.5% rate. Model your own scenario with the Canadian mortgage calculator.
External references
- CMHC — Mortgage loan insurance overview
- FCAC — Mortgage default insurance guide
- OSFI Guideline B-20 — Residential mortgage underwriting
- Sagen — Private mortgage default insurer
- Canada Guaranty — Mortgage insurance
Common questions
What is mortgage default insurance in Canada and who requires it?
Mortgage default insurance — commonly called CMHC insurance — is mandatory for any insured mortgage in Canada: a purchase where the down payment is less than 20% of the purchase price. The insurance protects the lender (not you) if you default. It is provided by three approved insurers: CMHC, Sagen, and Canada Guaranty. The premium is added to your mortgage balance and amortized over the life of the loan.
What is the new insured mortgage price cap as of 2027?
Since December 2024, the purchase price cap for insured mortgages was raised from $1 million to $1.5 million. This means buyers purchasing homes up to $1.5 million with less than 20% down can access insured mortgage rates — typically 0.10–0.30% lower than uninsured rates due to lender risk reduction. The change was aimed at helping buyers in high-cost markets like Toronto and Vancouver. See FCAC's mortgage insurance overview for eligibility details.
What are the 2027 CMHC mortgage insurance premium rates?
CMHC premiums are calculated as a percentage of the insured loan amount, based on your LTV ratio: 5–9.99% down (95% LTV): 4.00% of the loan; 10–14.99% down (90% LTV): 3.10%; 15–19.99% down (85% LTV): 2.80%. These rates have been unchanged since 2017. Provincial sales tax (PST) applies on top of the premium in Ontario (8%), Quebec (9%), Saskatchewan (6%), and Manitoba (6%) — and must be paid at closing, not added to the mortgage. Full rate table at CMHC premium cost page.
Can first-time buyers get a 30-year amortization with an insured mortgage in 2027?
Yes — effective August 2024, the federal government extended 30-year amortization eligibility to first-time homebuyers purchasing any property, and all buyers purchasing new construction. Previously, insured mortgages were capped at 25-year amortization. The longer amortization reduces monthly payments (a $500,000 mortgage at 5.5% drops from ~$2,950/month at 25 years to ~$2,716/month at 30 years) but significantly increases total interest paid over the life of the loan. Compare options with the Canadian mortgage calculator.
How does CMHC insurance differ from Sagen and Canada Guaranty?
All three insurers offer equivalent protection and are approved by OSFI. The key difference is that CMHC is government-owned while Sagen and Canada Guaranty are private insurers. Premium rates are identical across all three. Lenders typically choose the insurer — you do not select it. Some lenders have preferences based on underwriting speed or risk profile. For non-standard files (self-employed, non-traditional income), Sagen and Canada Guaranty are sometimes more flexible. FCAC's comparison of mortgage insurers is the best reference.
What is the stress test rate for insured mortgages in 2027?
Insured mortgages in Canada must qualify at the federal stress test rate, which is the higher of: your contract rate + 2%, or the Bank of Canada benchmark qualifying rate (currently 5.25%). In 2027, with contract rates around 4.5–5.0%, the stress test typically means qualifying at 6.5–7.0%. This test applies regardless of whether you use CMHC, Sagen, or Canada Guaranty. OSFI Guideline B-20 is the regulatory source.
Calculate your CMHC premium with the Canadian mortgage calculator, learn about the stress test, or read the complete CMHC insurance guide.