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Canada Mortgage and Housing Corporation (CMHC) insurance is required for high-ratio mortgages (less than 20% down payment). It protects the lender against default. The premium is added to the mortgage and paid over the amortization period.

For homes under $500,000: minimum 5%. For homes $500,000-$999,999: 5% on first $500,000 + 10% on remainder. For homes $1,000,000+: minimum 20%. These rules changed in December 2024 for homes under $1.5 million.

In Canada, mortgages compound semi-annually (twice per year) by law, regardless of payment frequency. In the US, mortgages compound monthly. This means Canadian rates are slightly different from a monthly compounding equivalent.

For insured mortgages (less than 20% down), maximum amortization is 25 years. For uninsured mortgages with 20%+ down, some lenders allow 30 years. As of August 2024, first-time buyers of new builds can get 30-year insured mortgages.

Canada's mortgage stress test requires borrowers to qualify at the higher of the contract rate plus 2%, or 5.25%. This ensures borrowers can still afford payments if rates rise, even if they are currently taking a lower rate.

Fixed rates are locked for a term (typically 5 years). Variable rates fluctuate with the prime rate. Historically, variable rates have been lower on average, but fixed rates offer stability. Canada's mortgage terms renew, unlike 30-year fixed US mortgages.