DeedWorthGuide · QuebecMortgage Insurance Premium: What CMHC Coverage Costs in 2026
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In brief — As soon as your down payment is below 20%, mortgage loan insurance (CMHC, Sagen or Canada Guaranty) is mandatory. The premium runs from 0.60% to 4.00% of the loan depending on the loan-to-value ratio, and it is added to the borrowed principal — you amortize it with the mortgage. In Quebec, the QST on the premium (9.975%) is paid in cash at closing and cannot be financed.
Mortgage insurance is what makes buying a plex with 5% or 10% down possible as an owner-occupant. It protects the lender — not you — but it is what unlocks high-ratio financing. Here is its real cost in 2026, and how it enters your profitability math.
When is it mandatory?
The rule fits in one line: down payment < 20% of the price (loan-to-value above 80%) → insurance is mandatory. At 20% and above, the loan is conventional: no premium.
Three conditions frame access to a high-ratio insured loan:
- Live in one unit: the 1-to-4-unit building must be your principal residence. A pure rental requires a 20% minimum down payment — high-ratio insurance is not offered. See the down payment by plex type.
- Price under $1,500,000: above this cap (in force since December 15, 2024), no high-ratio insured loan.
- 4 units maximum: from 5 units up, you move into multi-unit financing — see MLI Select.
The 2026 scale: premium by down payment
The premium is a percentage of the loan (not the price), set by the loan-to-value ratio (LTV):
| Down payment | Loan-to-value | Premium |
|---|---|---|
| 35% and up | ≤ 65% | 0.60% |
| 25% to 34.99% | 65.01 – 75% | 1.70% |
| 20% to 24.99% | 75.01 – 80% | 2.40% |
| 15% to 19.99% | 80.01 – 85% | 2.80% |
| 10% to 14.99% | 85.01 – 90% | 3.10% |
| 5% to 9.99% | 90.01 – 95% | 4.00% |
Two useful readings of this table:
- The most expensive jump is the last one. Going from 10% down to 5% pushes the premium from 3.10% to 4.00% — on a bigger loan, on top of it.
- A premium can exist even above 20% down. The 0.60–2.40% bands apply to lower-ratio insured loans (for instance when required by certain lenders); in the classic path with 20% or more down, no insurance is required.
The premium is financed — its tax is not
The premium is not a cash expense: it is added to the borrowed principal and amortized with the mortgage. You pay it spread over 25 years, with interest.
Quebec exception: the premium is subject to QST at 9.975%, payable in cash at the notary — it is not added to the loan. Budget it with your closing cash, alongside the welcome tax and notary fees.
Two worked examples
Duplex at $500,000, owner-occupied, 5% down. Base loan: $475,000. LTV 95% → 4.00% premium = $19,000, added to principal: you amortize $494,000. In Quebec, 9.975% QST on the premium: about $1,895 in cash at closing.
Triplex at $600,000, owner-occupied, 10% down. Base loan: $540,000. LTV 90% → 3.10% premium = $16,740, amortized principal: $556,740. QST: about $1,670 in cash.
In both cases, the premium weighs on debt service for the whole amortization: it belongs in the borrowing power calculation and in projected cash flow — not just in upfront costs.
How to reduce (or eliminate) the premium
- Reach 20%: the only threshold that removes the insurance entirely. An FHSA can speed up the down-payment build-up.
- Cross a band: moving from 5% to 10% down, or 10% to 15%, lowers the premium rate AND the insured principal. The saving is double.
- Compare scenarios: a smaller down payment frees cash for other projects, at the cost of the premium and heavier debt service. It is a trade-off to quantify, not a reflex.
Model your scenario
DeedWorth builds the insurance premium into the full calculation: down payment by property type, premium added to principal, debt service, cash flow and after-tax return. Analyze a plex with DeedWorth →
FAQ
How much does mortgage insurance cost in 2026? From 0.60% to 4.00% of the loan depending on the loan-to-value ratio. With 5% down, the premium is 4.00% of the loan; with 10%, 3.10%; at 20% and above, no insurance is required in the classic path.
Is the CMHC premium paid in cash? No: it is added to the borrowed principal and amortized with the mortgage. In Quebec, only the 9.975% QST on the premium is paid in cash at closing.
Is mortgage insurance available for a pure rental? No. For a 1-to-4-unit building not occupied by the owner, high-ratio lending is not offered: 20% minimum down payment, hence no premium.
Is there a price cap for insured mortgages? Yes: $1,500,000 since December 15, 2024. Above it, at least 20% down is required.
Who are Canada's mortgage insurers? CMHC (the Crown corporation) and two private insurers, Sagen and Canada Guaranty. Premium scales are essentially aligned.
Read more
- Down payment for a plex: the 2026 rules
- Borrowing power and the B-20 stress test
- Using your FHSA to buy a plex
This article is for information only and is neither advice nor a confirmation of eligibility. Surcharges or specific conditions may apply depending on profile and product; confirm your scenario with a lender or mortgage broker. Last verified: July 2026.