CMHC Rental Holdback and Premiums Update

‍Rental Achievement Holdback Updates

Rental achievement holdbacks will no longer be a policy requirement for construction loans under the MLI Market Rental product. These loans can be advanced up to the lower of 85% of the loan-to-cost (LTC) or 85% loan-to-value (LTV) without the need for a rental achievement holdback. This change applies to all loan purposes under the MLI market rental product.

For MLI Select applications, a rental achievement holdback may still be applied depending on the characteristics of the application.

For context, previously Market Rental construction financing may achieve a maximum loan of up to 85% LTV or 100% LTC, whichever amount is less, as determined by CMHC. During construction, the loan can advance up to 75% LTC or LTV, whichever is less. Any additional loan amounts above were subject to rental achievement.

This Rental Achievement Holdback update is effective immediately.

CMHC Premiums Updates

CMHC has revised its Premiums Schedules and Rates, Surcharges and Discounts for their Multi Unit Mortgage Loan Insurance (“MU MLI”) products. This change will be effective July 14, 2025, and will be applied to applications submitted on or after the effective date. Please see CMHC Updated Premiums Schedule here.

This change aims to align itself with the level of risk associated with specific loan characteristics and with the new Mortgage Insurer Capital Adequacy Test requirements set out by the Office of the Superintendent of Financial Institutions coming into effect in January 2026.

Premiums Schedule and Rates

Specific premium rates will apply to both the Market Rental and MLI Select products based on the Loan-to-Value (LTV) ratio (as determined by CMHC), and the loan purpose, i.e., construction financing or All Other Loan Purposes (purchase or refinance of existing properties and completion take-outs).

Two premium schedules will be in place based on shelter types:

·       (1) Standard Rental Housing (5+ multi-family units) or;

·       (2) All Other Shelter Models (single room occupancy, student housing, retirement homes and supportive housing).

Previously, there were separate premium schedules for single room occupancy, student housing, retirement homes and supportive housing, respectively, based on LTV. Now, these premiums are all consolidated under “other shelter types”.

It should be noted that for Market Rental (Non-Select) premiums for purchase or refinance of existing properties and completion take-outs with EGI Met have not changed.

For Other Shelter Models with EGI Met, LTV premiums previously ranged between from 3.35% to 6.10% for student housing and single room occupancy and between 4.10% to 6.60% for retirement homes and supportive housing. The new consolidated range starts between 6.30% and 7.75% (and up to 8.75% for Select).

Premium credit (available for the refinance of an existing CMHC-insured loan, subject to certain criteria) schedules remain the same.

Premium Surcharges

Surcharges will now apply to MLI Select products and Market Rental products. Previously, surcharges were targeted towards Market Rental products.

For most, this update dilutes the previous benefits of MLI Select premium savings as there is now an additional 0.25% surcharge for every 5-year amortization surplus above 25 years (meaning a Select loan obtaining 50-year amortization [via 100 points] would incur an additional 1.25% in premium surcharges), on-top of the LTV premiums denoted above.

MLI Select Discounts

A premium discount schedule will apply to all qualifying MLI Select applications where borrowers commit to affordability, energy efficiency and/or accessibility outcomes. The size of the discount increases with the number of points awarded and applies to the base premium plus any applicable surcharges, ranging from a 10% to 30% discount.

Summary

In sum, CMHC has updated these premiums to be reflective of their views on risk; the greater the leverage and exposure, the greater the premium charge increase. These changes have a larger impact on the MLI Select Program and MLI Market financing for All Other Shelter Models (single room occupancy, student housing, retirement homes and supportive housing). A few common scenarios below:

·       Previously, with 100 Points under MLI Select: a 95% LTV Refinance/ 95% LTPP purchase with EGI Met and 50-year amortization would have total premiums of 2.55%. With this premium increase, the new premium would be 5.18% (Base LTV Premiums of 6.15% + Amortization Premium of 1.25% [50 years] + Discount of 30% [for achieving 100 Points]),representing a 103% increase in premiums.

·       For 70 Points under MLI Select: a 95% LTV Refinance/ 95% LTPP purchase with EGI Met and 45-year amortization would previously have total premiums of 3.30%. The new premium would be 5.72% (Base LTV Premiums of 6.15% + Amortization Premium of 1.00% [45 years] + Discount of 20% [for achieving 70 Points]), representing a 73% increase in premiums.

·       For 50 Points under MLI Select: a 85% LTV Refinance/ 85% LTPP purchase with EGI Met and 40-year amortization would previously have total premiums of 3.80%. The new premium would increase by 44% to 5.49%.

Please see the table below for the premium change and comparison.

If you have any questions, please feel free to reach out to one of our team members.

CMHC Market Rental Premium Comparison

CMHC Standard Housing MLI Select Comparison