CMHC stands for the Canada Mortgage and Housing Corporation. It is a Canadian Crown corporation that provides mortgage loan insurance, housing policy and programs, research, and analysis to the Canadian housing industry. Its primary objective is to promote the construction and maintenance of strong, healthy, and sustainable communities and homes across Canada.

That’s why mortgage insurance is mandatory in Canada when your down payment is less than 20% of the value of the mortgage. CMHC provides mortgage insurance to protect the lender against the risk of a default, and as a result, lenders are willing to provide mortgages to buyers that otherwise might not qualify.