Understanding Mortgage Related Insurance
What each type is, when it applies and where to learn more.
The short answer
Four kinds of insurance come up with a mortgage. Home insurance is required by your lender before closing. CMHC (default) insurance is required if you put less than 20% down and protects the lender. Mortgage protection pays your mortgage if you die or can't work. Personal life and disability insurance is broader, portable coverage you own.
Lacroix Mortgage Group is a Calgary mortgage team licensed with and powered by Mortgage Connection Inc., a mortgage brokerage licensed in Alberta by the Real Estate Council of Alberta (RECA), and part of the DLCG network. Our brokers are individually licensed. See licence details.
The Four Types
What is mortgage protection insurance?
Your lender will offer mortgage protection with your commitment. It pays some or all of your mortgage if you pass away, become critically ill or can't work. Most people are insurable now, and life has a way of changing that.
Mortgage protection → Do I need home insurance before closing?
Yes. Your lender requires proof of home insurance before closing, and your lawyer needs a copy of the insurance binder to release funds. Arrange it early to avoid delays.
Home insurance → Is life and disability insurance the same as mortgage protection?
No. Personal life and disability insurance is separate, often broader and portable. A new mortgage is a good time to review your coverage.
Life and disability insurance → What is CMHC mortgage insurance?
If your down payment is under 20%, your mortgage must be insured through CMHC, Sagen or Canada Guaranty. It protects the lender, not you, and the premium is added to your mortgage.
CMHC insurance explained →Questions about coverage?
We're happy to help you figure out what's right for you.
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