Closing Costs & Insurance
CMHC vs Sagen vs Canada Guaranty: Mortgage Insurers Compared
CMHC vs Sagen vs Canada Guaranty: how Canada's three mortgage default insurers differ, who picks yours, and what the premium adds to your closing costs.
CMHC vs Sagen vs Canada Guaranty is a comparison most borrowers never get to act on, because your lender chooses the insurer. If your down payment is under 20%, federal rules require mortgage default insurance on your loan, and the premium comes from whichever of the three approved insurers your lender uses. All three are federally regulated, all three price in a similar range, and the differences that actually hit your wallet are ownership, the premium table that applies, and the provincial sales tax layered on top.
What mortgage default insurance actually does
Default insurance protects the lender, not you. If you stop paying and the lender sells the home for less than the balance owed, the insurer covers the shortfall. Because the lender's risk drops, it can offer a lower rate than it would on an uninsured loan, which is the main reason insured mortgages often carry cheaper rates than uninsured ones.
Two products people mix up with it:
- Mortgage life insurance pays off your balance if you die. Default insurance does not.
- Portfolio insurance is bought by the lender on loans that do not legally require insurance. It can appear as a fee on your file even when your down payment is large.
Insurance is triggered on a purchase when your loan-to-value ratio sits above 80%, meaning a down payment below 20%. Federal rules around the insured price cap and longer amortizations have shifted recently, so confirm the current limits before you shop. Our guide to mortgage default insurance in Canada covers the full framework.
CMHC vs Sagen vs Canada Guaranty at a glance
| Insurer | Structure | Who sets the premium |
|---|---|---|
| CMHC | Crown corporation, wholly owned by the Government of Canada | CMHC's published premium table |
| Sagen MI Canada | Private company, formerly Genworth Canada | Sagen's own premium table |
| Canada Guaranty | Privately held insurer | Its own premium table |
CMHC is typically the largest by volume and the only one that publishes detailed public data. Sagen and Canada Guaranty are private and answer to shareholders rather than Parliament. Functionally, all three do the same job under the same federal rules, and most major lenders are approved with more than one of them.
How the premium is calculated
Every insurer prices off two main variables: loan-to-value ratio and amortization length. A 95% LTV loan costs more to insure than an 85% LTV loan, and a longer amortization costs more than a shorter one. Each insurer publishes its own table, and the ranges overlap closely without being identical.
The premium is charged as a percentage of your loan amount. You can pay it upfront in cash or add it to your mortgage balance. Adding it is convenient, but you then pay interest on the premium across the whole amortization, which can multiply its true cost several times over. Your commitment letter must show the premium.
Provincial sales tax applies to insurance premiums in some provinces and not others, while GST does not apply to the premium itself. That tax is easy to overlook when estimating closing costs when buying a house.
Does the insurer change your rate or your odds?
Not directly. Your interest rate comes from the lender; the insurer only backstops the lender against loss. What can change is lender policy. Some lenders are approved with all three insurers, others with only one or two. If your file is unusual, such as self-employed income, a rental property, or a non-standard property type, those insurer relationships can decide whether the deal gets done at all.
That is the practical answer to cmhc vs sagen vs canada guaranty: for a salaried borrower with a straightforward property, the three are close enough that the choice rarely moves your payment. Run your own numbers with the CMHC mortgage insurance calculator before you commit.
How insurance interacts with the stress test
Because the premium is usually financed into the mortgage, it raises your balance and your payment, and both feed into qualification. Lenders measure you with GDS and TDS ratios, and your file has to clear the federal mortgage stress test. You qualify at the higher of your contract rate plus two percentage points or the published qualifying-rate floor. Confirm the current floor with OSFI or your lender rather than assuming a number.
A financed premium that looks small as a percentage can still shift your ratios at the margins, especially if you are already close on TDS. Our walkthroughs of the Canadian mortgage stress test and GDS and TDS ratios show how the arithmetic works.
When you can avoid the premium entirely
Put down 20% or more and default insurance is no longer required on a standard purchase. Lenders often price uninsured mortgages slightly higher, though, and some charge an application or portfolio-insurance fee to offset their own risk. Compare total cost, not just the headline rate.
First-time buyers have down payment help available through the RRSP Home Buyers' Plan, the First Home Savings Account (FHSA), and various provincial programs. See first-time home buyer programs in Canada for the current lineup.
What to check before you sign
- Which insurer your lender is using, and why that one.
- The premium rate for your LTV and amortization, quoted as a dollar figure.
- Whether the premium is paid upfront or added to the balance.
- Whether provincial sales tax applies to the premium in your province.
- Whether your quoted rate is insured or uninsured pricing, and what changes if your down payment crosses 20%.
- Whether a longer amortization raises the premium, and by how much.
Ask for these in writing on the commitment letter. The insurer is the lender's choice, but the premium is your money, and it belongs in your budget from day one.
Frequently asked questions
Can I choose between CMHC, Sagen, and Canada Guaranty?
Usually no. Your lender holds the relationship with the insurers and decides which one covers your file. A few lenders work with all three, others with only one or two. You can ask which insurer is being used and why, and you can compare lenders on total cost, but you generally cannot pick the insurer yourself.
Is CMHC more expensive than Sagen or Canada Guaranty?
Not meaningfully. All three price premiums on the same two drivers, your loan-to-value ratio and amortization length, and their published tables sit in a similar range. Any difference is usually small next to the interest rate you negotiate. Confirm the current premium for your specific LTV tier with your lender rather than assuming one insurer is cheaper.
Does it matter which insurer my lender uses?
For a standard salaried borrower with a typical property, barely. The coverage and the rules are the same federally. It matters more for unusual files, such as self-employed income or non-standard properties, where a particular insurer's appetite or a lender's approved-insurer list can affect whether your application is approved at all.
Do I have to pay default insurance if I put 20% down?
No. At 20% down or more, your loan-to-value ratio drops to 80% or below and default insurance is not required on a standard purchase. Be aware that lenders often price uninsured mortgages a little higher, and some charge a fee for their own portfolio insurance. Compare the total cost, not the rate alone.