Mortgage insurance Mortgage default insurance, commonly referred to as CMHC insurance, protects the lender in the case the borrower defaults on the mortgage. Mortgage default insurance is required on all mortgages with down payments of less than 20%, which are known as high ratio mortgages.

What does CMHC cover?

CMHC mortgage loan insurance lets you get a mortgage for up to 95% of the purchase price of a home. It also ensures you get a reasonable interest rate, even with your smaller down payment. ... During economic slumps when down payments may be harder to save, it ensures the availability of mortgage funding.

What is the purpose of the CMHC?

CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry. A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs.