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What is CMHC Mortgage Loan Insurance?

If your downpayment is less than 20% of the purchase price, you are required to take out additional insurance, called mortgage loan insurance, with the Canada Mortgage Housing Corporation (CMHC). The insurance helps protect lending financial institutions against the risk of mortgage default.

This insurance lets borrowers purchase a home with only 5% downpayment while enjoying interest rates comparable to those with a 20% downpayment.

CMHC Mortgage Loan Insurance is not to be confused with Desjardins Loan Insurance which guarantees repayment of the loan in the event of the insured's death.