If your down payment is less than 20%, your mortgage must be insured against default. This protects the lender, not you - but it's what makes low-down-payment homeownership possible in Canada.
Who provides it
Three insurers: CMHC, Sagen, and Canada Guaranty. Your lender chooses, and the premiums are similar across all three.
What it costs
The premium is a percentage of your mortgage that rises as your down payment shrinks - roughly 2.8% to 4.0% of the loan. It's added to your mortgage rather than paid upfront, so it's financed over your amortization.
The upside
Insured mortgages are lower-risk for lenders, so they often come with lower interest rates than uninsured ones - partly offsetting the premium.
Have questions about your situation? An advisor can walk you through it.