Also known as mortgage default insurance, this is a form or protection for lenders (and that lender’s investors) in the event that a borrower defaults on his or her payments.
For homebuyers with a down payment of less than 20%, insurance is generally required by law. Default insurance is provided by either CMHC, Genworth or Canada Guaranty.
Mortgage insurers charge a premium for this insurance coverage, which is typically paid by the borrower and added to the mortgage.
CMHC offers a calculator to determine the mortgage insurance premium here.« Back to Glossary Index