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Mortgage Glossary

Terms & Definitions

Canadian Mortgage And Housing Corporation (CMHC)

Canadian Mortgage and Housing Corporation is a Canadian federal government housing agency that provides default insurance for homeowners purchasing a home with less than 20% down payment — also known as a high-ratio mortgage.

Default insurance is given by the federal housing agency as a means of providing banks and lenders it regulates insurance in the event homebuyers default on their mortgage. The CMHC mortgage loan insurance premium is a percentage of the mortgage amount and is added to the principal balance being borrowed on a mortgage.

It’s important to note CMHC does not provide default insurance on house prices of $1,000,000 or more. In such cases, home buyers must get a conventional mortgage, which requires a minimum of 20% as a down payment.

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