The Canada Mortgage Housing Corporation (CMHC) is a government corporation that insures all high ratio mortgages. The purpose of the Canada Mortgage Housing Corporation is to allow home buyers to purchase real estate by providing the lender or bank with mortgage default insurance to protect the lender or bank’s loan, in the event the borrowers fall into default of a mortgage.

CMHC has a very strict set of guidelines for which they consider mortgage default insurance. The borrower must demonstrate that he/she has good credit, and the ability to prove their income, as per income tax returns to show they are able to afford mortgage payments, to reduce the chance of the borrower(s) defaulting on their mortgage.