What brokers need to know about CMHC's new mortgage loan insurance pricing structure
Canada Mortgage and Housing Corporation (CMHC) has announced upcoming changes to its multi-unit mortgage loan insurance (MU MLI) premiums, tying premium rates more closely to the risk profile of the loans being insured.
The adjustments, effective July 14, are part of CMHC’s annual premium review and will apply across all MU MLI products, including MLI Select.
The revised premium structure will now be more closely aligned with the risk characteristics of the loan being insured. That includes considerations like lower borrower equity or loans for new construction projects, both of which carry higher underwriting risk.
CMHC said these changes are meant to ensure products remain sustainably priced, aligned with capital requirements, and available across economic cycles.
The federal housing agency is also introducing a new premium discount schedule within the MLI Select applications. Borrowers will see reduced premiums if their projects achieve measurable social outcomes, including affordability, accessibility, or energy efficiency. Existing premium surcharges, however, will remain unchanged.
“These premium changes will allow CMHC to continue to offer MU MLI products and encourage lenders to finance the building of new rental supply at a time when it is so vital to housing needs,” the Crown corporation said in a media release.
The insurer noted that the change also aligns with updated capital requirements from the Office of the Superintendent of Financial Institutions (OSFI). Under the revised Mortgage Insurer Capital Adequacy Test (MICAT), CMHC must maintain larger capital reserves for higher-risk loans, such as those with minimal down payments or more complex construction profiles.
Rising home insurance rates
Advocacy groups are also sounding the alarm over the rising cost of home insurance amid growing climate risks.
The Investors for Paris Compliance (I4PC) has filed a complaint with the Financial Services Regulatory Authority of Ontario (FSRA), calling for a formal investigation into what it describes as unchecked increases in homeowners’ insurance rates. The group argues that floods, wildfires, and other extreme weather events linked to climate change are pushing premiums to unaffordable levels and leaving some homeowners unable to secure coverage.
“What we're asking for, first and foremost, is just for FSRA to look at this issue and investigate it,” said Kiera Taylor, senior policy analyst at I4PC. “At a minimum, we want FSRA to consider public disclosure of rate changes like they do with auto insurance, so there's increased transparency.”
Although FSRA currently publishes detailed data on auto insurance rate trends, I4PC notes there is no equivalent reporting for home insurance, despite mounting costs. According to a My Choice Financial Inc. analysis, home insurance rates in Ontario rose 84% between 2014 and 2024, compared to a 76% increase nationwide, far outpacing the 28% rise in inflation over the same period.
The Insurance Bureau of Canada (IBC) reported $8.5 billion in insured losses in 2024, nearly three times the 2023 total. Major events contributing to that figure included hailstorms in Calgary, floods in Quebec, and the Jasper wildfire.
Read more: Home insurance premiums set to surge across Canada
Insurance claims have risen 115% over the last five years, while the cost of replacing personal property has ballooned by nearly 500%, IBC data shows.
“It’s really in FSRA’s mandate to investigate this, and they just aren’t,” said Taylor.
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