CMHC vs Sagen vs Canada Guaranty
Work out the default insurance premium on a high-ratio mortgage, the 30-year amortization surcharge, and the tax on the premium you pay in cash at closing in Ontario, Quebec and Saskatchewan.
Your scenario
Result
The premium is added to the mortgage. The tax on it in ON, QC and SK is paid in cash at closing and cannot be financed.
Rules checked: September 2026. Sources: CMHC premiums · Sagen premium chart · Ontario RST on insurance
Mortgage default insurance in Canada — the basics
If your down payment is under 20% of the purchase price, federal rules require mortgage default insurance (also called high-ratio insurance or CMHC insurance). It protects the lender if you default, not you, and the premium is normally added to the mortgage and repaid over the amortization.
Three insurers write it: CMHC (a federal Crown corporation), Sagen (private, formerly Genworth Canada) and Canada Guaranty (private). Your lender picks the insurer, not you, so the comparison that matters is less about price and more about which insurer will approve an unusual file.
Standard purchase premiums
CMHC's and Sagen's published purchase schedules carry the same rates on the bands a high-ratio buyer pays (CMHC, Sagen):
- 80.01–85% LTV (15% to under 20% down): 2.80%
- 85.01–90% LTV (10% to under 15% down): 3.10%
- 90.01–95% LTV (5% to under 10% down): 4.00%
- Amortization over 25 years (up to 30): add 0.20%
Lower bands (0.60%, 1.70%, 2.40%) exist for lender-insured loans at 80% LTV or less; a buyer with 20% down does not pay them. Minimum down payment is 5% of the first $500,000 and 10% of the portion above, and insurance is not available at a purchase price of $1.5 million or more. Canada Guaranty publishes its own rate sheet — confirm the figure on your commitment.
Worked example
A $720,000 purchase with $72,000 down borrows $648,000 at 90% LTV — the 3.10% band — so the premium is $20,088, financed into a $668,088 mortgage. In Ontario the 8% tax on that premium is $1,607, due in cash at closing. Choose a 30-year amortization and the rate becomes 3.30%: a $21,384 premium and $1,711 of tax.
Where the three insurers actually differ
On a standard file the price is the same, so the differences are in underwriting appetite: how each treats self-employed income, newcomers with limited Canadian credit history, borrowed or gifted down payments, and properties outside the usual owner-occupied profile. Those guidelines change more often than the premium schedule, which is why brokers check the insurer's current program sheet before submitting a borderline deal rather than relying on a general rule.
Tax on the premium
Three provinces tax the insurance premium itself, payable at closing and not financeable:
- Ontario: 8% (Retail Sales Tax on insurance premiums)
- Quebec: 9% tax on insurance premiums — Revenu Québec has announced it rises to 9.975% for premiums paid after December 31, 2026
- Saskatchewan: 6% PST on insurance premiums
How to reduce the premium
- Get over a band edge. Each band is priced on the whole loan, so reaching exactly 10% or 15% down drops the rate on every dollar borrowed — see the down payment savings goal calculator for how long the top-up takes.
- Weigh the 30-year option honestly: the 0.20% surcharge is small next to the extra five years of interest.
- Buying a newly built, energy-efficient home? CMHC's Eco Plus offers a 25% partial premium refund on qualifying homes.
Related
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