Mortgage Insurance in Canada: What Edmonton Buyers Need to Know
5% down on homes under $1M. 4% insurance premium on that. Plus the FHSA and HBP programs that can save you $100K in tax-free money.
✅ Key Takeaways:
- CMHC insurance required on purchases under 20% down
- Premium: 4% of mortgage at 5% down, added to the loan
- Alberta has no PST on the premium (saves $1,000-$2,000 vs Ontario)
- FHSA + RRSP HBP can provide up to $200,000 in tax-advantaged down payment for a couple
- The First-Time Home Buyer Incentive was cancelled March 2024
You Need Insurance If You Put Less Than 20% Down
CMHC mortgage default insurance is required on any home purchase where the buyer puts down less than 20%. It protects the lender, not you. You pay for it.
The insurance premium is a percentage of your mortgage amount, added to the loan:
| Down Payment | Premium Rate |
|---|---|
| 5-10% | 4.00% |
| 10-15% | 3.10% |
| 15-20% | 2.80% |
| 20-25% | 2.40% |
| 25-35% | 1.70% |
| 35%+ | 0.60% |
Edmonton example: On a $450K home with 5% down ($22,500), your mortgage is $427,500. The 4% insurance premium adds $17,100, making your total mortgage $444,600. On a $300K condo with 10% down, the premium adds $8,370.
No insurance on homes over $1.5M. Minimum 20% down required.
Alberta advantage: Unlike Ontario, Manitoba, and Quebec, Alberta does not charge provincial sales tax on the CMHC premium. That saves you roughly $1,000-$2,000 compared to buying in Toronto.
Eco bonus: CMHC offers a 25% refund on the premium for energy-efficient homes.
The FHSA: $40K Tax-Free for Your First Home
The First Home Savings Account (FHSA) is the best tool available for first-time buyers in Canada:
- Contribute up to $8,000/year, lifetime max $40,000
- Contributions are tax-deductible (like an RRSP)
- Growth is tax-free (like a TFSA)
- Withdrawals for a home purchase are tax-free
- Unused contribution room carries forward (max $8,000/year carry-forward)
- Must be opened by age 71
This is the only account in Canada that gives you a tax deduction going in AND tax-free money coming out. If you are planning to buy in 2-5 years, open one immediately and start contributing.
The RRSP Home Buyers' Plan: $60K More
The Home Buyers' Plan lets you withdraw up to $60,000 per person ($120,000 for a couple) from your RRSP tax-free for a home purchase. You repay it over 15 years starting the second year after withdrawal. Missed payments are added to your taxable income.
Combined strategy: A couple can accumulate up to $80,000 in FHSA funds + $120,000 from HBP = $200,000 in tax-advantaged down payment money. On Edmonton's $450K median home, that is a 44% down payment with no CMHC insurance needed.
The First-Time Home Buyer Incentive Is Dead
The federal shared-equity mortgage program through CMHC was cancelled on March 21, 2024. It no longer exists. Ignore any article that still references it.
What This Means in Edmonton
Edmonton's median residential sold price is $473K. The median condo is $251K. At these price points:
- 5% down on a condo ($251K): $12,550 down, $9,540 insurance premium, ~$1,340/month mortgage at 4.5%
- 10% down on a house ($473K): $47,300 down, $13,197 insurance premium, ~$2,500/month mortgage at 4.5%
- 20% down on a house ($473K): $94,600 down, no insurance, ~$2,150/month mortgage at 4.5%
The 20% threshold saves you roughly $13K in insurance on a median-priced home. If you can get there using FHSA + HBP, do it.
Edmonton Housing Market
Search homes in your price range
🎯 The Bottom Line: If you are a first-time buyer, open an FHSA immediately and start contributing $8,000/year. Combined with the RRSP Home Buyers' Plan, a couple can accumulate $200,000 in tax-advantaged down payment money. On Edmonton's $450K median home, that is a 44% down payment with zero CMHC insurance needed.
Frequently Asked Questions
Can I avoid CMHC insurance? Yes, with 20% or more down payment. On Edmonton's $473K median, that is $94,600.
Is CMHC insurance tax-deductible? Not for owner-occupied homes. For rental properties, the premium can be deducted over the life of the mortgage.
What is the FHSA contribution deadline? You can contribute $8,000/year with a $40,000 lifetime max. Unused room carries forward. The account must be closed by year 15 or when you make a qualifying withdrawal.
Can I use both FHSA and HBP for the same purchase? Yes. This is the most powerful combination available to first-time buyers in Canada.
Insurance premiums from CMHC. FHSA and HBP details from Canada.ca. March 2026.