CMHC plays an important role in the home buying process for many Canadians. A Crown Corporation originally established in 1945, CMHC provides Mortgage Loan Insurance that enables homebuyers to purchase property with as little as 5% down payment.
This Insurance eliminates the risk to Mortgage Lenders, enabling them to provide financing at lower rates with smaller down payments than would be normally required. Without CMHC Insurance, a full 20% down payment is needed to purchase a home.
CMHC also provides an essential safety net to our financial system, ensuring Mortgage funding is available during times of economic downturns and recession. This was shown recently as the Federal Government aimed to purchase up to $125 Billion in Insured Mortgage Pools providing long term stable funding to Mortgage Lenders allowing them to continue lending to consumers.