Mortgage insurance, which is sometimes called mortgage default insurance, is a credit risk management tool that protects mortgage lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender will submit a claim to the mortgage insurer to recover its losses.

The law requires federally regulated lenders to obtain mortgage insurance on loans where homebuyers make down payments of less than 20 per cent of the purchase price of the home. The borrowers are required to pay for the premium for the mortgage insurance, which can be added to the mortgage balance.

Mortgage insurers work with lenders, mortgage brokers, real estate agents and builders to make homeownership more accessible to Canadians. There are currently three mortgage insurance companies in Canada:

  • CMHC - Canada Mortgage and Housing Corporation

  • Genworth Financial Canada

  • Canada Guaranty

CMHC

Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency. We are committed to helping Canadians access a wide choice of quality, affordable homes, while making vibrant, healthy communities and cities a reality across the country. CMHC works to enhance Canada's housing finance options, assist Canadians who cannot afford housing in the private market, improve building standards and housing construction, and provide policymakers with the information and analysis they need to sustain a vibrant housing market in Canada.

www.cmhc-schl.gc.ca

Genworth Financial Canada

Genworth Financial Canada, The Homeownership Company, is the leading private sector supplier of mortgage default insurance in Canada. Genworth works with lenders, mortgage brokers, real estate agents and builders to make homeownership more accessible throughout Canada. The company combines global experience in mortgage insurance with technological and service leadership to deliver innovation to the mortgage marketplace.

www.genworth.ca

Canada Guaranty

On April 16, 2010, a Canadian private investor group, comprised of the Ontario Teachers' Pension Plan and National Mortgage Guaranty Holdings Inc., acquired AIG United Guaranty Mortgage Insurance Company Canada. This transaction created the only Canadian-owned private mortgage insurance company, known as Canada Guaranty Mortgage Insurance Company ("Canada Guaranty").

www.canadaguaranty.ca