Plain meaning
A mortgage protected by mortgage default insurance, commonly required when a borrower has a smaller down payment.
Also called
default-insured mortgage
CMHC-insured mortgage
mortgage insurance
Key points
- Mortgage default insurance protects the lender, not the borrower, if the borrower defaults.
- Federal rules can set price caps, amortization limits, and eligibility conditions for insured mortgages.
- Premiums add to the cost of borrowing and may be paid upfront or added to the mortgage.
- Insured-mortgage rules can affect access to home ownership and housing demand.
Why it comes up
Federal mortgage-rule changes often focus on insured mortgages, price caps, amortization periods, and first-time buyer eligibility.