This applies to you if you:
- Are buying a home with less than 20% down payment
- Want to understand what CMHC insurance actually costs
- Are a first-time buyer in Calgary or Alberta
- Are comparing whether to wait for 20% down vs buying now with insurance
- Want to understand what 'insured mortgage' means
What CMHC Insurance Actually Is
CMHC (Canada Mortgage and Housing Corporation) provides mortgage default insurance to lenders when borrowers have less than 20% down payment. The insurance protects the lender — not you — if you default on the loan.
In exchange for this protection, lenders take on lower-down-payment borrowers they otherwise wouldn't. You pay the premium. The lender gets the protection. That's the trade.
What CMHC Insurance Costs
| Down Payment % | CMHC Premium | Example: $500K Home |
|---|---|---|
| 5% | 4.00% of mortgage | $19,000 added to mortgage |
| 10% | 3.10% of mortgage | $13,950 added to mortgage |
| 15% | 2.80% of mortgage | $11,900 added to mortgage |
| 20%+ | 0% — no insurance required | $0 |
Important: You don't pay this at closing.
The CMHC premium is added to your mortgage balance. You pay it back slowly over your amortization period. On a $500K home with 5% down, the $19,000 premium at 4.5% over 25 years adds roughly $105/month to your payment.
Who Provides Mortgage Insurance in Canada
- CMHC — government-backed, most common, slightly higher premiums
- Sagen (formerly Genworth) — private insurer, same premium structure
- Canada Guaranty — private insurer, same premium structure
- All three are equivalent in cost and function — lender chooses which one
The Real Question: Buy Now With CMHC or Wait for 20% Down?
This is the most common question for Calgary first-time buyers. Here's how to think about it:
- Enter the market now — lock in today's price
- In a rising market, appreciation may far exceed the insurance cost
- Start building equity immediately
- FHSA + RRSP HBP can provide $80–200K toward a larger down payment anyway
- Saves $10–19K in insurance premiums on a $500–600K home
- Market risk: prices could rise further while saving
- Right if you can save 20% within 12–18 months
- Wrong if it means renting for 3–5 more years
CMHC Rules for First-Time Buyers in 2026
- Available on homes up to $999,999 (no CMHC above $1M)
- Minimum 5% down on homes under $500K
- 5% on first $500K + 10% on remainder for $500K–$999K
- 30-year amortization now available for all first-time buyers (since Aug 2024)
- Stress test applies — qualify at rate + 2% or 5.25%
For the complete first-time buyer picture — all programs, income requirements, and the mortgage process from start to keys — see the main first-time home buyer Calgary guide.