CMHC's 2025 Shake-Up: What the New Multi-Unit Mortgage Insurance Changes Mean for Canadian Developers
Let’s Set the Scene
CMHC has long been the quiet partner behind Canada’s rental supply machine. If you’re building or buying an apartment building, chances are your financing hinges on CMHC’s mortgage insurance — and for good reason.
With CMHC-insured financing, builders and investors can access:
- Lower interest rates
- Smaller down payments (as little as 5–15%)
- Stretched amortizations up to 50 years
- Easier debt servicing qualification
It’s been a game-changer — especially for high-density projects in Calgary, Edmonton, and Vancouver. But as of July 14, 2025, that affordability advantage is about to get more expensive for some borrowers — and more strategic for others.
What’s Changing?
1. New Risk-Based Premium Pricing
CMHC has launched a new pricing model for multi-unit mortgage insurance. Your premium now depends on factors like loan-to-value (LTV), construction vs. takeout financing, amortization length, and the property type.
Standard Rental Housing
| LTV | Construction Financing | All Other Loan Purposes |
|---|---|---|
| Up to 65% | 3.25% | 2.60% |
| Up to 70% | 3.75% | 2.85% |
| Up to 75% | 4.25% | 3.35% |
| Up to 80% | 5.00% | 4.35% |
| Up to 85% | 6.00% | 5.35% |
| Up to 90% (MLI Select only) | 6.75% | 5.90% |
| Over 90% (MLI Select only) | 7.00% | 6.15% |
Shelter Models (Student Housing, Seniors, SRO, Supportive)
| LTV | Construction Financing | All Other Loan Purposes |
|---|---|---|
| Up to 65% | 6.55% | 6.30% |
| Up to 70% | 6.85% | 6.60% |
| Up to 75% | 7.15% | 6.90% |
| Up to 80% | 7.30% | 7.05% |
| Up to 85% | 8.00% | 7.75% |
| Up to 90% (MLI Select only) | 8.25% | 8.00% |
| Over 90% (MLI Select only) | 9.00% | 8.75% |
2. New Surcharges Apply
| Surcharge | Amount | Trigger |
|---|---|---|
| Extended amortization | +0.25% | Every 5 years beyond 25 years |
| Non-residential space | +1.00% | Portion of loan used for commercial space |
| Second mortgage | +0.50% | Outstanding balance of the first mortgage |
| Income not met at funding | +0.25% | When rents fall below projected levels |
3. MLI Select Now Offers Premium Discounts
CMHC is launching a new discount schedule that rewards projects delivering real community value.
If your project earns points for any of the following, you'll qualify for a lower premium — even on deals that carry surcharges:
- Affordability: Offering below-market rents
- Accessibility: Designing units for physical disabilities
- Energy Efficiency: Meeting green building or retrofit standards
Discounts scale based on how many points your project earns. The higher your score, the greater the reduction. This makes it more worthwhile to design with purpose from day one.
4. Rental Achievement Holdbacks Removed (for Market Housing)
CMHC has eliminated a long-standing frustration for developers using the market rental product (not MLI Select):
- You no longer have to prove lease-up or rental income targets before receiving your full loan advance.
- You can now borrow up to 85% of loan-to-cost or loan-to-value during construction.
This change applies immediately to:
- New applications submitted on or after July 3, 2025
- Previously approved deals that haven’t yet funded
For MLI Select deals, CMHC may still apply rental holdbacks based on market risk, project complexity, and borrower experience. These are under review and may change in the coming months.
Why CMHC Is Making These Changes
It’s Not Just About Revenue
Let’s break down the real drivers behind this shake-up:
1. Demand is Exploding
Multi-unit insurance use jumped by nearly 30% last year alone. In 2024, CMHC insured more than 283,000 rental units. The appetite for this kind of financing is massive — and growing fast.
2. The Regulator Wants More Safety
Canada’s federal banking regulator is raising capital requirements. Starting January 1, 2026, CMHC must hold more reserves for higher-risk loans. This is part of the new capital framework for mortgage insurers.
To prepare:
- CMHC has already suspended dividend payouts to the federal government
- And they’re now increasing premiums to ensure financial strength without cutting access to financing
Bottom line: CMHC is still offering strong financing terms — but they need to price them more accurately to reflect risk.
How This Affects You
Construction Loans Just Got Pricier
If you’re pursuing high-leverage (90–95%) with long amortizations (40–50 years), your insurance premium could double. In some cases — particularly on construction — it’s even higher.
Thin-Margin Projects Could Stall
If your deal barely worked under the old pricing, it might not fly anymore. Expect more scrutiny, re-budgeting, and risk of cancellation for fringe projects.
Smarter Projects Win
Projects that are affordable, green, or inclusive may come out ahead. Between the base rate and the new discount schedule, thoughtful planning could offset the increases — or at least make them manageable.
What You Should Do Next
If you’re working on a deal set to close in late 2025 or early 2026, here’s how to navigate:
- Re-price your project using the updated premium tables — especially if it closes after July 14
- Model the full cost — base premium + any surcharges – any eligible discounts
- Evaluate CMHC Market vs. MLI Select based on your deal structure
- Account for holdbacks in your draw schedule if using MLI Select
- Incorporate social outcomes into your project to improve eligibility and reduce cost
Let’s Talk Strategy
If you’re unsure how this affects your project — or want a second set of eyes on your numbers — our team at Spire can help.
We’re already running updated scenarios for clients and partners across Canada. We’ll show you:
- Whether your CMHC-insured deal still offers a net benefit
- How to qualify for MLI Select premium discounts
- When it makes sense to explore conventional financing instead
Let’s keep your project funded, viable, and moving forward — even in a shifting landscape.
