Who are the mortgage default insurers in Canada?

The Three Mortgage Insurers in Canada – What You Need to Know

In Canada, mortgage insurance is required for homebuyers who have a down payment of less than 20% of the purchase price of the home. This insurance protects lenders in case the borrower defaults on their mortgage. These types of mortgages are called High Ratio Mortgages.

There are three mortgage insurers in Canada: Canada Mortgage and Housing Corporation (CMHC), Genworth Canada, and Canada Guaranty. Here’s what you need to know about each of them.

Canada Mortgage and Housing Corporation (CMHC)

As mentioned in our previous article, CMHC is a federal agency responsible for administering the National Housing Strategy and ensuring that Canadians have access to safe and affordable housing. CMHC is also the largest mortgage insurer in Canada, with a market share of approximately 65%.

CMHC offers mortgage insurance for both high-ratio mortgages (those with a down payment of less than 20%) and low-ratio mortgages (those with a down payment of 20% or more). Mortgage insurance premiums for high-ratio mortgages vary depending on the down payment amount, with premiums ranging from 1.45% to 4.00% of the mortgage amount. Premiums for low-ratio mortgages are lower and vary based on the amortization period and loan-to-value ratio.

Sagen (Previously Genworth Canada)

Sagen is a private mortgage insurer that has been operating in Canada since 1995. They offer mortgage insurance for high-ratio mortgages, with premiums ranging from 1.80% to 4.00% of the mortgage amount. Sagen also offers a range of products and services to help homebuyers and homeowners, including homebuyer education and financial wellness programs.

Canada Guaranty

Canada Guaranty is another private mortgage insurer that has been operating in Canada since 2010. They offer mortgage insurance for high-ratio mortgages, with premiums ranging from 1.75% to 4.00% of the mortgage amount. Canada Guaranty also offers a range of products and services to help homebuyers and homeowners, including homebuyer education and financial literacy programs.

Which Mortgage Insurer Should You Choose?

When it comes to choosing a mortgage insurer, there isn’t necessarily a right or wrong choice. Each insurer has its own set of products, services, and premiums, so it’s important to do your research and compare your options.

In general, CMHC is often seen as the default choice for mortgage insurance in Canada, given their status as a federal agency and its large market share. However, Sagen and Canada Guaranty can also be good options, particularly if you’re looking for personalized service or a lower premium.

In Canada, mortgage insurance is required for homebuyers who have a down payment of less than 20% of the purchase price of the home. There are three mortgage insurers in Canada: Canada Mortgage and Housing Corporation (CMHC), Sagen, and Canada Guaranty. Each insurer offers mortgage insurance for high-ratio mortgages, with varying premiums and services. When choosing a mortgage insurer, it’s important to do your research and compare your options to find the best fit for your needs. For more information on mortgage default insurance contact a local mortgage broker.