What is mortgage loan insurance?
Mortgage loan insurance is insurance provided by Canada Mortgage and Housing Corporation (CMHC), a crown corporation, and GE Capital Mortgage Insurance Company, an approved private corporation. CMHC is the only underwriter available in Canada for mini homes. This insurance is required by law to insure lenders against default on mortgages with a loan-to-value ratio greater than 75%. The insurance premiums, ranging from .6% to 4%, are paid by the borrower and can be added directly to the mortgage amount. This is not the same as mortgage life insurance.
Here’s a table showing an example of what kinds of fees you might expect to pay to have your mortgage underwritten by CMHC:
| Loan amount (Relative to Home Equity) | CMHC Fee |
| Up to and including 65% | 0.6% |
| Up to and including 75% | 1.7% |
| Up to and including 80% | 2.4% |
| Up to and including 85% | 2.8% |
| Up to and including 90% | 3.1% |
| Up to and including 95% | 4% |
