Mortgage default insurance, often referred to as CMHC insurance or default insurance which only protects the lender in the event of a borrower defaulting on their mortgage, most commonly done by missing mortgage payments.
Mortgage default insurance shouldn’t be confused or mixed with creditor insurance, life insurance, disability insurance, or property/home insurance. Those are different types of insurances that apply to different things.
There are three mortgage default insurers which lenders obtain mortgage default insurance from; Canada Mortgage and Housing Corporation (CMHC), Genworth Insurance, and Canada Guaranty.
Mortgage default insurance is payable by a borrower, by means of the mortgage default insurance premium being added on top of their principal mortgage balance, and is paid as one with their mortgage payment, only when the borrower purchases a property with less than 20% down payment, and 35% if self employed.