Mortgage default insurers (CMHC, Sagen, Canada Guaranty)
Canada has three mortgage default insurers, and the policy they issue protects your lender if you stop paying, not you, even though you're the one who foots the bill.
If your down payment is under 20% of the purchase price, the law requires your mortgage to carry default insurance (also called mortgage loan insurance, or CMHC insurance after the biggest provider). Three companies write it in Canada: CMHC, the federal Crown corporation; Sagen (formerly Genworth Canada); and Canada Guaranty. All three are backed by a federal guarantee and operate under the same core rules, so from your seat they're close to interchangeable. Your lender picks which one to use; you rarely get a say, and there's no consumer benefit to shopping between them.
Here's the part the name hides: this insurance covers the lender, not you. If you default and the home sells for less than you owe, the insurer pays the lender the shortfall, then can come after you for it. You pay the premium (0.6% to 4.5% of the loan, driven mainly by the size of your down payment, with the top rate reserved for borrowed down payments), it gets added to your mortgage, and you carry interest on it for the life of the loan, yet the protected party is the bank. What it buys you is access: because the lender's risk is covered, it will lend to you with as little as 5% down and often at a lower rate than an uninsured mortgage would carry.
Your "insured status" shapes both pricing and eligibility. Insured mortgages (under 20% down) usually get the lowest advertised rates because the lender carries almost no risk. But insurance is only available inside strict limits: the home must be under $1.5 million (as of December 15, 2024), and amortization caps at 25 years unless you're a first-time buyer or buying new construction, where 30 years is allowed. Go above those lines and no insurer will touch the loan, which forces you into an uninsured mortgage needing 20% down or more.
So the counterintuitive result is that a smaller down payment can unlock a cheaper rate, while a buyer with 20% down sits in the uninsured market and sometimes pays more per month on rate, even though they've dodged the premium. Which path costs less overall depends on your numbers; the point is that "insured" isn't a fallback for people who couldn't save enough, it's a distinct pricing category with its own math.