CMHC Mortgage Loan Insurance Update 2025 | MLI Select Premium Changes

Planning to Invest in Multi-Unit Housing? Here’s What CMHC’s 2025 Premium Updates Mean for You
If you're looking to finance the construction or purchase of a multi-unit residential building in Canada, there's an important update you need to know about.

As of July 14, 2025, the Canada Mortgage and Housing Corporation (CMHC) will implement significant changes to its mortgage loan insurance premiums for multi-unit properties. This update affects all CMHC-insured multi-unit mortgage products, including the increasingly popular MLI Select program.

Let’s dive into what’s changing, how it impacts developers and investors, and why this is still one of the best financing tools available in Canada’s real estate market.

What Is CMHC Mortgage Loan Insurance?

CMHC mortgage loan insurance protects lenders from losses if a borrower defaults on their mortgage. For multi-unit properties, it allows lenders to offer -

Lower down payments

Longer amortization periods

Access to more competitive interest rates

This insurance plays a critical role in making rental housing development financially viable — especially for projects focused on affordability, accessibility, and sustainability.

What's Changing on July 14, 2025?

Following CMHC’s annual premium review, the organization is updating both its premium structure and rates for multi-unit mortgage loan insurance (MU MLI).

1. Standardized Premium Structure for All Products

CMHC will now apply a uniform risk-based pricing model to all multi-unit loan insurance products. This means your premium will be calculated based on project-specific factors such as:

Loan-to-value ratio

Project type (new construction or existing)

Social outcomes (affordable rents, energy efficiency, accessible design)

This change ensures that insurance premiums reflect the actual risk of each loan, making the system fairer and more sustainable.

2. MLI Select Gets a Premium Discount Schedule

If you're using MLI Select, you could save even more.

CMHC is introducing a new premium discount system for MLI Select applications. Discounts are based on the level of social outcomes your project achieves in these categories:

Affordability: Lower rent thresholds

Accessibility: Barrier-free units and universal design

Energy Efficiency: High-performance building standards

The more impact your project creates, the greater your discount on mortgage loan insurance premiums.

3. Compliance with New Capital Requirements

These changes also align CMHC with the updated Mortgage Insurer Capital Adequacy Test (MICAT) guidelines issued by the Office of the Superintendent of Financial Institutions (OSFI).

This ensures that CMHC holds adequate capital to cover risks — allowing them to keep offering competitive mortgage insurance even in uncertain markets.

Why This Matters for Real Estate Investors

These updates may seem technical, but their impact is clear: affordable financing is still within reach, especially for responsible developers and builders.

Let’s look at an example:

Scenario: A $15.6 million, 48-unit new construction loan
Financed through: MLI Select
Results:

~12% monthly mortgage savings compared to conventional loans

~$3 million less in required down payment

Even with the new structure, MLI Select remains one of the most powerful financing tools for multi-unit development in Canada.

CMHC’s Ongoing Impact on the Canadian Rental Market

CMHC isn’t just adjusting premiums — it's evolving to meet national housing needs.

In the last 10 years, CMHC has insured over 1.5 million rental units

340,000+ of those were newly built

Demand for purpose-built rentals continues to grow amid housing shortages

With rising construction costs and high interest rates, CMHC’s multi-unit mortgage loan insurance helps make rental housing feasible — from coast to coast.

What Should You Do Now?

If you’re developing or refinancing a rental property, here’s how to get ahead of the change:

1. Review your project under MLI Select

Projects that emphasize affordability, accessibility, or sustainability may now qualify for premium discounts.

2. Compare insurance costs pre- and post-July 14

If you’re close to submitting your application, it may be worth getting it in before the premium changes take effect — depending on your project's features.

3. Consult a CMHC-experienced lender or advisor

Understanding the impact of new capital and premium structures on your long-term financing is key.

Final Thoughts - CMHC Still Leads the Way for Affordable Multi-Unit Financing

While some may focus on premium “increases,” the reality is this: CMHC’s revised mortgage loan insurance model is more transparent, fair, and rewarding for impact-driven developers.

If your project supports Canada's housing needs — especially around affordability and energy-efficiency — these changes could actually work in your favor.

Looking to finance your next multi-unit project with CMHC?
Get expert guidance, resources, and updates tailored to investors and developers.

Contact The Homess to explore financing options, CMHC updates, and rental housing insights. Let’s build a smarter, stronger rental market in Canada — together.